Correlation Between MYR and JNS Holdings

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

By analyzing existing cross correlation between MYR Group and JNS Holdings Corp, you can compare the effects of market volatilities on MYR and JNS Holdings 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 MYR with a short position of JNS Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of MYR and JNS Holdings.

Diversification Opportunities for MYR and JNS Holdings

-0.22

Correlation Coefficient

MYR  JNS Holdings

Very good diversification

The 3 months correlation between MYR and JNS is -0.22. Overlapping area represents the amount of risk that can be diversified away by holding MYR Group and JNS Holdings Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on JNS Holdings Corp and MYR 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 MYR Group are associated (or correlated) with JNS Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of JNS Holdings Corp has no effect on the direction of MYR i.e., MYR and JNS Holdings go up and down completely randomly.

Pair Corralation between MYR and JNS Holdings

Given the investment horizon of 90 days MYR is expected to generate 3.75 times less return on investment than JNS Holdings. But when comparing it to its historical volatility, MYR Group is 1.79 times less risky than JNS Holdings. It trades about 0.03 of its potential returns per unit of risk. JNS Holdings Corp is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest  0.25  in JNS Holdings Corp on October 26, 2024 and sell it today you would earn a total of  0.01  from holding JNS Holdings Corp or generate 4.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

MYR Group  vs.  JNS Holdings Corp

MYR Group

Risk-Adjusted Performance

13 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in MYR Group are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. Despite nearly weak basic indicators, MYR reported solid returns over the last few months and may actually be approaching a breakup point.

JNS Holdings Corp

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days JNS Holdings Corp has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fairly strong basic indicators, JNS Holdings is not utilizing all of its potentials. The latest stock price confusion, may contribute to short-horizon losses for the traders.

Pair Trading with MYR and JNS Holdings

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

The idea behind MYR Group and JNS Holdings Corp 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 Commodity Directory module to find actively traded commodities issued by global exchanges.