Correlation Between Jay Mart and Muramoto Electron

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

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

Diversification Opportunities for Jay Mart and Muramoto Electron

0.63

Correlation Coefficient

Jay Mart  Muramoto Electron

Poor diversification

The 3 months correlation between Jay and Muramoto is 0.63. Overlapping area represents the amount of risk that can be diversified away by holding Jay Mart Public and Muramoto Electron Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Muramoto Electron Public and Jay Mart 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 Jay Mart Public are associated (or correlated) with Muramoto Electron. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Muramoto Electron Public has no effect on the direction of Jay Mart i.e., Jay Mart and Muramoto Electron go up and down completely randomly.

Pair Corralation between Jay Mart and Muramoto Electron

Assuming the 90 days trading horizon Jay Mart Public is expected to under-perform the Muramoto Electron. In addition to that, Jay Mart is 1.85 times more volatile than Muramoto Electron Public. It trades about -0.12 of its total potential returns per unit of risk. Muramoto Electron Public is currently generating about -0.18 per unit of volatility. If you would invest  19,550  in Muramoto Electron Public on September 25, 2024 and sell it today you would lose (2,650) from holding Muramoto Electron Public or give up 13.55% of portfolio value over 90 days.

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

Jay Mart Public  vs.  Muramoto Electron Public

Jay Mart Public

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Jay Mart Public has generated negative risk-adjusted returns adding no value to investors with long positions. Despite conflicting performance in the last few months, the Stock's fundamental drivers remain somewhat 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.

Muramoto Electron Public

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Muramoto Electron Public has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's fundamental drivers remain somewhat 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.

Pair Trading with Jay Mart and Muramoto Electron

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

The idea behind Jay Mart Public and Muramoto Electron 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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.