Correlation Between Sonic Interfreight and Jay Mart

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

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

Diversification Opportunities for Sonic Interfreight and Jay Mart

-0.83

Correlation Coefficient

Sonic Interfreight  Jay Mart

Pay attention - limited upside

The 3 months correlation between Sonic and Jay is -0.83. Overlapping area represents the amount of risk that can be diversified away by holding Sonic Interfreight 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 Sonic Interfreight 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 Sonic Interfreight 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 Sonic Interfreight i.e., Sonic Interfreight and Jay Mart go up and down completely randomly.

Pair Corralation between Sonic Interfreight and Jay Mart

Assuming the 90 days trading horizon Sonic Interfreight Public is expected to generate 0.42 times more return on investment than Jay Mart. However, Sonic Interfreight Public is 2.39 times less risky than Jay Mart. It trades about 0.25 of its potential returns per unit of risk. Jay Mart Public is currently generating about -0.33 per unit of risk. If you would invest  171.00  in Sonic Interfreight Public on October 5, 2024 and sell it today you would earn a total of  5.00  from holding Sonic Interfreight Public or generate 2.92% return on investment over 90 days.

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

Sonic Interfreight Public  vs.  Jay Mart Public

Sonic Interfreight Public

Risk-Adjusted Performance

16 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Sonic Interfreight Public are ranked lower than 16 (%) of all global equities and portfolios over the last 90 days. Despite somewhat conflicting fundamental drivers, Sonic Interfreight may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Jay Mart Public

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Jay Mart Public has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest conflicting performance, the Stock's fundamental drivers remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

Pair Trading with Sonic Interfreight and Jay Mart

The main advantage of trading using opposite Sonic Interfreight and Jay Mart positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sonic Interfreight 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 Sonic Interfreight 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.

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 Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.