Correlation Between RS Public and Jay Mart

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

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

Diversification Opportunities for RS Public and Jay Mart

0.01

Correlation Coefficient

RS Public  Jay Mart

Significant diversification

The 3 months correlation between RS-R and Jay is 0.01. Overlapping area represents the amount of risk that can be diversified away by holding RS Public and Jay Mart Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jay Mart Public and RS Public 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 RS Public are associated (or correlated) with Jay Mart. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jay Mart Public has no effect on the direction of RS Public i.e., RS Public and Jay Mart go up and down completely randomly.

Pair Corralation between RS Public and Jay Mart

Assuming the 90 days trading horizon RS Public is expected to generate 1.0 times more return on investment than Jay Mart. However, RS Public is 1.0 times less risky than Jay Mart. It trades about 0.16 of its potential returns per unit of risk. Jay Mart Public is currently generating about 0.16 per unit of risk. If you would invest  720.00  in RS Public on August 31, 2024 and sell it today you would lose (145.00) from holding RS Public or give up 20.14% of portfolio value over 90 days.

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

RS Public  vs.  Jay Mart Public

RS Public

Risk-Adjusted Performance

12 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in RS Public are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. Despite quite weak forward-looking signals, RS Public disclosed solid returns over the last few months and may actually be approaching a breakup point.

Jay Mart Public

Risk-Adjusted Performance

12 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Jay Mart Public are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. Even with relatively weak basic indicators, Jay Mart reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with RS Public and Jay Mart

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

The idea behind RS Public and Jay Mart 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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.