Correlation Between Redfin Corp and J W

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

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

Diversification Opportunities for Redfin Corp and J W

0.11

Correlation Coefficient

Redfin Corp  J W

Average diversification

The 3 months correlation between Redfin and MAYS is 0.11. Overlapping area represents the amount of risk that can be diversified away by holding Redfin Corp and J W Mays in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on J W Mays and Redfin Corp 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 Redfin Corp are associated (or correlated) with J W. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of J W Mays has no effect on the direction of Redfin Corp i.e., Redfin Corp and J W go up and down completely randomly.

Pair Corralation between Redfin Corp and J W

Given the investment horizon of 90 days Redfin Corp is expected to generate 3.31 times more return on investment than J W. However, Redfin Corp is 3.31 times more volatile than J W Mays. It trades about 0.02 of its potential returns per unit of risk. J W Mays is currently generating about -0.07 per unit of risk. If you would invest  979.00  in Redfin Corp on September 4, 2024 and sell it today you would lose (10.00) from holding Redfin Corp or give up 1.02% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	34.38%
Values	Daily Returns

Redfin Corp  vs.  J W Mays

Redfin Corp

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Redfin Corp are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of very unsteady technical and fundamental indicators, Redfin Corp may actually be approaching a critical reversion point that can send shares even higher in January 2025.

J W Mays

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days J W Mays has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest weak performance, the Stock's basic indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the firm private investors.

Pair Trading with Redfin Corp and J W

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

The idea behind Redfin Corp and J W Mays 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 Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.