Correlation Between Land and Jay Mart

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Can any of the company-specific risk be diversified away by investing in both Land and Jay Mart at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Land and Jay Mart into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Land and Houses and Jay Mart Public, you can compare the effects of market volatilities on Land and Jay Mart and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Land with a short position of Jay Mart. Check out your portfolio center. Please also check ongoing floating volatility patterns of Land and Jay Mart.

Diversification Opportunities for Land and Jay Mart

0.68
  Correlation Coefficient

Poor diversification

The 3 months correlation between Land and Jay is 0.68. Overlapping area represents the amount of risk that can be diversified away by holding Land and Houses and Jay Mart Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jay Mart Public and Land is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Land and Houses are associated (or correlated) with Jay Mart. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jay Mart Public has no effect on the direction of Land i.e., Land and Jay Mart go up and down completely randomly.

Pair Corralation between Land and Jay Mart

Assuming the 90 days horizon Land and Houses is expected to generate 0.33 times more return on investment than Jay Mart. However, Land and Houses is 2.99 times less risky than Jay Mart. It trades about -0.06 of its potential returns per unit of risk. Jay Mart Public is currently generating about -0.03 per unit of risk. If you would invest  842.00  in Land and Houses on September 4, 2024 and sell it today you would lose (292.00) from holding Land and Houses or give up 34.68% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthSignificant
Accuracy100.0%
ValuesDaily Returns

Land and Houses  vs.  Jay Mart Public

 Performance 
       Timeline  
Land and Houses 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days Land and Houses has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent fundamental drivers, Land is not utilizing all of its potentials. The latest stock price mess, may contribute to short-term losses for the institutional investors.
Jay Mart Public 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days Jay Mart Public has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest conflicting performance, the Stock's fundamental drivers remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

Land and Jay Mart Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Land and Jay Mart

The main advantage of trading using opposite Land and Jay Mart positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Land position performs unexpectedly, Jay Mart can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Jay Mart will offset losses from the drop in Jay Mart's long position.
The idea behind Land and Houses and Jay Mart Public pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.

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