Correlation Between Major Cineplex and Jasmine International

Can any of the company-specific risk be diversified away by investing in both Major Cineplex and Jasmine International 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 Major Cineplex and Jasmine International into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Major Cineplex Group and Jasmine International Public, you can compare the effects of market volatilities on Major Cineplex and Jasmine International 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 Major Cineplex with a short position of Jasmine International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Major Cineplex and Jasmine International.

Diversification Opportunities for Major Cineplex and Jasmine International

0.37

Correlation Coefficient

Major Cineplex  Jasmine International

Weak diversification

The 3 months correlation between Major and Jasmine is 0.37. Overlapping area represents the amount of risk that can be diversified away by holding Major Cineplex Group and Jasmine International Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jasmine International and Major Cineplex 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 Major Cineplex Group are associated (or correlated) with Jasmine International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jasmine International has no effect on the direction of Major Cineplex i.e., Major Cineplex and Jasmine International go up and down completely randomly.

Pair Corralation between Major Cineplex and Jasmine International

Assuming the 90 days trading horizon Major Cineplex Group is expected to generate 0.69 times more return on investment than Jasmine International. However, Major Cineplex Group is 1.44 times less risky than Jasmine International. It trades about 0.03 of its potential returns per unit of risk. Jasmine International Public is currently generating about -0.07 per unit of risk. If you would invest  1,390  in Major Cineplex Group on October 9, 2024 and sell it today you would earn a total of  20.00  from holding Major Cineplex Group or generate 1.44% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

Major Cineplex Group  vs.  Jasmine International Public

Major Cineplex Group

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Major Cineplex Group has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest weak 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.

Jasmine International

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Jasmine International Public has generated negative risk-adjusted returns adding no value to investors with long positions. Despite conflicting performance in the last few months, the Stock's basic indicators remain quite persistent which may send shares a bit higher in February 2025. The latest mess may also be a sign of long-standing up-swing for the company institutional investors.

Pair Trading with Major Cineplex and Jasmine International

The main advantage of trading using opposite Major Cineplex and Jasmine International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Major Cineplex position performs unexpectedly, Jasmine International 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 Jasmine International will offset losses from the drop in Jasmine International's long position.

The idea behind Major Cineplex Group and Jasmine International 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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.