Correlation Between JKN Global and Shangri La

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

By analyzing existing cross correlation between JKN Global Media and Shangri La Hotel Public, you can compare the effects of market volatilities on JKN Global and Shangri La 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 JKN Global with a short position of Shangri La. Check out your portfolio center. Please also check ongoing floating volatility patterns of JKN Global and Shangri La.

Diversification Opportunities for JKN Global and Shangri La

0.06

Correlation Coefficient

JKN Global  Shangri La

Significant diversification

The 3 months correlation between JKN and Shangri is 0.06. Overlapping area represents the amount of risk that can be diversified away by holding JKN Global Media and Shangri La Hotel Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shangri La Hotel and JKN Global 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 JKN Global Media are associated (or correlated) with Shangri La. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shangri La Hotel has no effect on the direction of JKN Global i.e., JKN Global and Shangri La go up and down completely randomly.

Pair Corralation between JKN Global and Shangri La

If you would invest  4,875  in Shangri La Hotel Public on September 15, 2024 and sell it today you would earn a total of  25.00  from holding Shangri La Hotel Public or generate 0.51% return on investment over 90 days.

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

JKN Global Media  vs.  Shangri La Hotel Public

JKN Global Media

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days JKN Global Media has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent basic indicators, JKN Global is not utilizing all of its potentials. The latest stock price mess, may contribute to short-term losses for the institutional investors.

Shangri La Hotel

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Shangri La Hotel Public are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Despite somewhat conflicting fundamental drivers, Shangri La sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with JKN Global and Shangri La

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

The idea behind JKN Global Media and Shangri La Hotel 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 Bonds Directory module to find actively traded corporate debentures issued by US companies.