Correlation Between Sharps Technology and Jeffs Brands

Can any of the company-specific risk be diversified away by investing in both Sharps Technology and Jeffs Brands 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 Sharps Technology and Jeffs Brands into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Sharps Technology Warrant and Jeffs Brands, you can compare the effects of market volatilities on Sharps Technology and Jeffs Brands 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 Sharps Technology with a short position of Jeffs Brands. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sharps Technology and Jeffs Brands.

Diversification Opportunities for Sharps Technology and Jeffs Brands

-0.51

Correlation Coefficient

Sharps Technology  Jeffs Brands

Excellent diversification

The 3 months correlation between Sharps and Jeffs is -0.51. Overlapping area represents the amount of risk that can be diversified away by holding Sharps Technology Warrant and Jeffs Brands in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jeffs Brands and Sharps Technology 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 Sharps Technology Warrant are associated (or correlated) with Jeffs Brands. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jeffs Brands has no effect on the direction of Sharps Technology i.e., Sharps Technology and Jeffs Brands go up and down completely randomly.

Pair Corralation between Sharps Technology and Jeffs Brands

Assuming the 90 days horizon Sharps Technology is expected to generate 4.08 times less return on investment than Jeffs Brands. But when comparing it to its historical volatility, Sharps Technology Warrant is 1.75 times less risky than Jeffs Brands. It trades about 0.02 of its potential returns per unit of risk. Jeffs Brands is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest  3.71  in Jeffs Brands on September 15, 2024 and sell it today you would lose (0.72) from holding Jeffs Brands or give up 19.41% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	85.71%
Values	Daily Returns

Sharps Technology Warrant  vs.  Jeffs Brands

Sharps Technology Warrant

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Sharps Technology Warrant has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly uncertain basic indicators, Sharps Technology may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Jeffs Brands

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Jeffs Brands are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. In spite of fairly weak basic indicators, Jeffs Brands showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Sharps Technology and Jeffs Brands

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

The idea behind Sharps Technology Warrant and Jeffs Brands 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 Commodity Directory module to find actively traded commodities issued by global exchanges.