Correlation Between True Public and Jasmine International

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

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

Diversification Opportunities for True Public and Jasmine International

-0.33

Correlation Coefficient

True Public  Jasmine International

Very good diversification

The 3 months correlation between True and Jasmine is -0.33. Overlapping area represents the amount of risk that can be diversified away by holding True Public and Jasmine International Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jasmine International and True 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 True Public are associated (or correlated) with Jasmine International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jasmine International has no effect on the direction of True Public i.e., True Public and Jasmine International go up and down completely randomly.

Pair Corralation between True Public and Jasmine International

Assuming the 90 days trading horizon True Public is expected to generate 0.99 times more return on investment than Jasmine International. However, True Public is 1.01 times less risky than Jasmine International. It trades about 0.04 of its potential returns per unit of risk. Jasmine International Public is currently generating about -0.22 per unit of risk. If you would invest  1,143  in True Public on November 29, 2024 and sell it today you would earn a total of  37.00  from holding True Public or generate 3.24% return on investment over 90 days.

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

True Public  vs.  Jasmine International Public

True Public

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in True Public are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong basic indicators, True Public is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Jasmine International

Risk-Adjusted Performance

Very Weak

Over the last 90 days Jasmine International 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 fundamental drivers remain somewhat strong which may send shares a bit higher in March 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Pair Trading with True Public and Jasmine International

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

The idea behind True Public and Jasmine International 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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.