Correlation Between Cboe UK and Jardine Strategic

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

By analyzing existing cross correlation between Cboe UK Consumer and Jardine Strategic Holdings, you can compare the effects of market volatilities on Cboe UK and Jardine Strategic 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 Cboe UK with a short position of Jardine Strategic. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cboe UK and Jardine Strategic.

Diversification Opportunities for Cboe UK and Jardine Strategic

0.0

Correlation Coefficient

Cboe UK  Jardine Strategic

Pay attention - limited upside

The 3 months correlation between Cboe and Jardine is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Cboe UK Consumer and Jardine Strategic Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jardine Strategic and Cboe UK 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 Cboe UK Consumer are associated (or correlated) with Jardine Strategic. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jardine Strategic has no effect on the direction of Cboe UK i.e., Cboe UK and Jardine Strategic go up and down completely randomly.

Pair Corralation between Cboe UK and Jardine Strategic

If you would invest  2,879,235  in Cboe UK Consumer on September 30, 2024 and sell it today you would earn a total of  309,514  from holding Cboe UK Consumer or generate 10.75% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

Cboe UK Consumer  vs.  Jardine Strategic Holdings

Pair Trading with Cboe UK and Jardine Strategic

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

The idea behind Cboe UK Consumer and Jardine Strategic Holdings 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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..