Correlation Between Ardelyx and Jaguar Animal

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

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

Diversification Opportunities for Ardelyx and Jaguar Animal

0.72

Correlation Coefficient

Ardelyx  Jaguar Animal

Poor diversification

The 3 months correlation between Ardelyx and Jaguar is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding Ardelyx and Jaguar Animal Health in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jaguar Animal Health and Ardelyx 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 Ardelyx are associated (or correlated) with Jaguar Animal. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jaguar Animal Health has no effect on the direction of Ardelyx i.e., Ardelyx and Jaguar Animal go up and down completely randomly.

Pair Corralation between Ardelyx and Jaguar Animal

Given the investment horizon of 90 days Ardelyx is expected to under-perform the Jaguar Animal. But the stock apears to be less risky and, when comparing its historical volatility, Ardelyx is 2.16 times less risky than Jaguar Animal. The stock trades about -0.12 of its potential returns per unit of risk. The Jaguar Animal Health is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest  103.00  in Jaguar Animal Health on September 25, 2024 and sell it today you would earn a total of  0.00  from holding Jaguar Animal Health or generate 0.0% return on investment over 90 days.

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

Ardelyx  vs.  Jaguar Animal Health

Ardelyx

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Ardelyx has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unsteady performance in the last few months, the Stock's fundamental indicators remain fairly strong which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Jaguar Animal Health

Risk-Adjusted Performance

1 of 100

Very Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Jaguar Animal Health are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of fairly unsteady technical and fundamental indicators, Jaguar Animal may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Ardelyx and Jaguar Animal

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

The idea behind Ardelyx and Jaguar Animal Health 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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.