Correlation Between Penns Woods and Janone

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

By analyzing existing cross correlation between Penns Woods Bancorp and Janone Inc, you can compare the effects of market volatilities on Penns Woods and Janone 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 Penns Woods with a short position of Janone. Check out your portfolio center. Please also check ongoing floating volatility patterns of Penns Woods and Janone.

Diversification Opportunities for Penns Woods and Janone

-0.83

Correlation Coefficient

Penns Woods  Janone

Pay attention - limited upside

The 3 months correlation between Penns and Janone is -0.83. Overlapping area represents the amount of risk that can be diversified away by holding Penns Woods Bancorp and Janone Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Janone Inc and Penns Woods 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 Penns Woods Bancorp are associated (or correlated) with Janone. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Janone Inc has no effect on the direction of Penns Woods i.e., Penns Woods and Janone go up and down completely randomly.

Pair Corralation between Penns Woods and Janone

Given the investment horizon of 90 days Penns Woods is expected to generate 3.55 times less return on investment than Janone. But when comparing it to its historical volatility, Penns Woods Bancorp is 6.09 times less risky than Janone. It trades about 0.09 of its potential returns per unit of risk. Janone Inc is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest  53.00  in Janone Inc on October 3, 2024 and sell it today you would lose (53.00) from holding Janone Inc or give up 100.0% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Significant
Accuracy	55.81%
Values	Daily Returns

Penns Woods Bancorp  vs.  Janone Inc

Penns Woods Bancorp

Risk-Adjusted Performance

13 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Penns Woods Bancorp are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady basic indicators, Penns Woods exhibited solid returns over the last few months and may actually be approaching a breakup point.

Janone Inc

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Janone Inc has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy basic indicators, Janone is not utilizing all of its potentials. The current stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with Penns Woods and Janone

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

The idea behind Penns Woods Bancorp and Janone Inc 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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.