Correlation Between Regional Container and JRW Utility

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

By analyzing existing cross correlation between Regional Container Lines and JRW Utility Public, you can compare the effects of market volatilities on Regional Container and JRW Utility 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 Regional Container with a short position of JRW Utility. Check out your portfolio center. Please also check ongoing floating volatility patterns of Regional Container and JRW Utility.

Diversification Opportunities for Regional Container and JRW Utility

0.0

Correlation Coefficient

Regional Container  JRW Utility

Pay attention - limited upside

The 3 months correlation between Regional and JRW is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Regional Container Lines and JRW Utility Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on JRW Utility Public and Regional Container 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 Regional Container Lines are associated (or correlated) with JRW Utility. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of JRW Utility Public has no effect on the direction of Regional Container i.e., Regional Container and JRW Utility go up and down completely randomly.

Pair Corralation between Regional Container and JRW Utility

If you would invest  0.00  in JRW Utility Public on December 29, 2024 and sell it today you would earn a total of  0.00  from holding JRW Utility Public or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	1.61%
Values	Daily Returns

Regional Container Lines  vs.  JRW Utility Public

Regional Container Lines

Risk-Adjusted Performance

Very Weak

Over the last 90 days Regional Container Lines 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 essential indicators remain quite persistent which may send shares a bit higher in April 2025. The latest mess may also be a sign of long-standing up-swing for the company institutional investors.

JRW Utility Public

Risk-Adjusted Performance

Very Weak

Over the last 90 days JRW Utility Public has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent fundamental drivers, JRW Utility is not utilizing all of its potentials. The current stock price mess, may contribute to short-term losses for the institutional investors.

Pair Trading with Regional Container and JRW Utility

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

The idea behind Regional Container Lines and JRW Utility 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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.