Correlation Between Minnova Corp and JNC Resources

Can any of the company-specific risk be diversified away by investing in both Minnova Corp and JNC Resources 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 Minnova Corp and JNC Resources into the same portfolio, which is an essential part of the fundamental portfolio management process.

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

Diversification Opportunities for Minnova Corp and JNC Resources

0.3

Correlation Coefficient

Minnova Corp  JNC Resources

Weak diversification

The 3 months correlation between Minnova and JNC is 0.3. Overlapping area represents the amount of risk that can be diversified away by holding Minnova Corp and JNC Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on JNC Resources and Minnova Corp 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 Minnova Corp are associated (or correlated) with JNC Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of JNC Resources has no effect on the direction of Minnova Corp i.e., Minnova Corp and JNC Resources go up and down completely randomly.

Pair Corralation between Minnova Corp and JNC Resources

Assuming the 90 days horizon Minnova Corp is expected to generate 8.04 times more return on investment than JNC Resources. However, Minnova Corp is 8.04 times more volatile than JNC Resources. It trades about 0.36 of its potential returns per unit of risk. JNC Resources is currently generating about 0.19 per unit of risk. If you would invest  0.01  in Minnova Corp on September 13, 2024 and sell it today you would earn a total of  0.00  from holding Minnova Corp or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	95.45%
Values	Daily Returns

Minnova Corp  vs.  JNC Resources

Minnova Corp

Risk-Adjusted Performance

15 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Minnova Corp are ranked lower than 15 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile fundamental indicators, Minnova Corp reported solid returns over the last few months and may actually be approaching a breakup point.

JNC Resources

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in JNC Resources are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile fundamental indicators, JNC Resources reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Minnova Corp and JNC Resources

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

The idea behind Minnova Corp and JNC Resources 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 Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.