Correlation Between Tortoise Energy and Jacob Micro

Can any of the company-specific risk be diversified away by investing in both Tortoise Energy and Jacob Micro 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 Tortoise Energy and Jacob Micro into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Tortoise Energy Independence and Jacob Micro Cap, you can compare the effects of market volatilities on Tortoise Energy and Jacob Micro 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 Tortoise Energy with a short position of Jacob Micro. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tortoise Energy and Jacob Micro.

Diversification Opportunities for Tortoise Energy and Jacob Micro

0.33

Correlation Coefficient

Tortoise Energy  Jacob Micro

Weak diversification

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

Pair Corralation between Tortoise Energy and Jacob Micro

Assuming the 90 days horizon Tortoise Energy Independence is expected to under-perform the Jacob Micro. But the mutual fund apears to be less risky and, when comparing its historical volatility, Tortoise Energy Independence is 1.78 times less risky than Jacob Micro. The mutual fund trades about -0.18 of its potential returns per unit of risk. The Jacob Micro Cap is currently generating about -0.01 of returns per unit of risk over similar time horizon. If you would invest  2,812  in Jacob Micro Cap on October 10, 2024 and sell it today you would lose (15.00) from holding Jacob Micro Cap or give up 0.53% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	95.24%
Values	Daily Returns

Tortoise Energy Independence  vs.  Jacob Micro Cap

Tortoise Energy Inde

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Tortoise Energy Independence has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong basic indicators, Tortoise Energy is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Jacob Micro Cap

Risk-Adjusted Performance

12 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Jacob Micro Cap are ranked lower than 12 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak technical and fundamental indicators, Jacob Micro showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Tortoise Energy and Jacob Micro

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

The idea behind Tortoise Energy Independence and Jacob Micro Cap 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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.