Correlation Between Realfiction Holding and Jetpak Top

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

By analyzing existing cross correlation between Realfiction Holding AB and Jetpak Top Holding, you can compare the effects of market volatilities on Realfiction Holding and Jetpak Top 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 Realfiction Holding with a short position of Jetpak Top. Check out your portfolio center. Please also check ongoing floating volatility patterns of Realfiction Holding and Jetpak Top.

Diversification Opportunities for Realfiction Holding and Jetpak Top

-0.49

Correlation Coefficient

Realfiction Holding  Jetpak Top

Very good diversification

The 3 months correlation between Realfiction and Jetpak is -0.49. Overlapping area represents the amount of risk that can be diversified away by holding Realfiction Holding AB and Jetpak Top Holding in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jetpak Top Holding and Realfiction Holding 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 Realfiction Holding AB are associated (or correlated) with Jetpak Top. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jetpak Top Holding has no effect on the direction of Realfiction Holding i.e., Realfiction Holding and Jetpak Top go up and down completely randomly.

Pair Corralation between Realfiction Holding and Jetpak Top

Assuming the 90 days trading horizon Realfiction Holding AB is expected to under-perform the Jetpak Top. In addition to that, Realfiction Holding is 3.31 times more volatile than Jetpak Top Holding. It trades about -0.16 of its total potential returns per unit of risk. Jetpak Top Holding is currently generating about 0.08 per unit of volatility. If you would invest  9,900  in Jetpak Top Holding on September 2, 2024 and sell it today you would earn a total of  500.00  from holding Jetpak Top Holding or generate 5.05% return on investment over 90 days.

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

Realfiction Holding AB  vs.  Jetpak Top Holding

Realfiction Holding

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Realfiction Holding AB has generated negative risk-adjusted returns adding no value to investors with long positions. Despite uncertain performance in the last few months, the Stock's basic indicators remain somewhat strong which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Jetpak Top Holding

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Jetpak Top Holding are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong basic indicators, Jetpak Top is not utilizing all of its potentials. The newest stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Realfiction Holding and Jetpak Top

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

The idea behind Realfiction Holding AB and Jetpak Top Holding 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.

Check out your portfolio center.

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 Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.