Correlation Between JCK Hospitality and Jakpaisan Estate

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

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

Diversification Opportunities for JCK Hospitality and Jakpaisan Estate

-0.19

Correlation Coefficient

JCK Hospitality  Jakpaisan Estate

Good diversification

The 3 months correlation between JCK and Jakpaisan is -0.19. Overlapping area represents the amount of risk that can be diversified away by holding JCK Hospitality Public and Jakpaisan Estate Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jakpaisan Estate Public and JCK Hospitality 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 JCK Hospitality Public are associated (or correlated) with Jakpaisan Estate. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jakpaisan Estate Public has no effect on the direction of JCK Hospitality i.e., JCK Hospitality and Jakpaisan Estate go up and down completely randomly.

Pair Corralation between JCK Hospitality and Jakpaisan Estate

Assuming the 90 days trading horizon JCK Hospitality Public is expected to generate 3.24 times more return on investment than Jakpaisan Estate. However, JCK Hospitality is 3.24 times more volatile than Jakpaisan Estate Public. It trades about 0.16 of its potential returns per unit of risk. Jakpaisan Estate Public is currently generating about 0.1 per unit of risk. If you would invest  2.00  in JCK Hospitality Public on September 26, 2024 and sell it today you would earn a total of  1.00  from holding JCK Hospitality Public or generate 50.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	82.93%
Values	Daily Returns

JCK Hospitality Public  vs.  Jakpaisan Estate Public

JCK Hospitality Public

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in JCK Hospitality Public are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. Despite quite weak forward-looking signals, JCK Hospitality disclosed solid returns over the last few months and may actually be approaching a breakup point.

Jakpaisan Estate Public

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Jakpaisan Estate Public are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite quite weak forward-looking signals, Jakpaisan Estate disclosed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with JCK Hospitality and Jakpaisan Estate

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

The idea behind JCK Hospitality Public and Jakpaisan Estate 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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.