Correlation Between Silicon Craft and JCK Hospitality

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

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

Diversification Opportunities for Silicon Craft and JCK Hospitality

0.17

Correlation Coefficient

Silicon Craft  JCK Hospitality

Average diversification

The 3 months correlation between Silicon and JCK is 0.17. Overlapping area represents the amount of risk that can be diversified away by holding Silicon Craft Technology and JCK Hospitality Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on JCK Hospitality Public and Silicon Craft 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 Silicon Craft Technology are associated (or correlated) with JCK Hospitality. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of JCK Hospitality Public has no effect on the direction of Silicon Craft i.e., Silicon Craft and JCK Hospitality go up and down completely randomly.

Pair Corralation between Silicon Craft and JCK Hospitality

Assuming the 90 days trading horizon Silicon Craft Technology is expected to generate 0.11 times more return on investment than JCK Hospitality. However, Silicon Craft Technology is 9.07 times less risky than JCK Hospitality. It trades about -0.2 of its potential returns per unit of risk. JCK Hospitality Public is currently generating about -0.03 per unit of risk. If you would invest  398.00  in Silicon Craft Technology on December 30, 2024 and sell it today you would lose (70.00) from holding Silicon Craft Technology or give up 17.59% of portfolio value over 90 days.

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

Silicon Craft Technology  vs.  JCK Hospitality Public

Silicon Craft Technology

Risk-Adjusted Performance

Very Weak

Over the last 90 days Silicon Craft Technology 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 forward-looking signals 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.

JCK Hospitality Public

Risk-Adjusted Performance

Very Weak

Over the last 90 days JCK Hospitality Public 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 forward-looking signals 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.

Pair Trading with Silicon Craft and JCK Hospitality

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

The idea behind Silicon Craft Technology and JCK Hospitality 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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.