Correlation Between Jay Mart and Ubis Public

Can any of the company-specific risk be diversified away by investing in both Jay Mart and Ubis Public 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 Ubis Public 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 Ubis Public, you can compare the effects of market volatilities on Jay Mart and Ubis Public 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 Ubis Public. Check out your portfolio center. Please also check ongoing floating volatility patterns of Jay Mart and Ubis Public.

Diversification Opportunities for Jay Mart and Ubis Public

0.59

Correlation Coefficient

Jay Mart  Ubis Public

Very weak diversification

The 3 months correlation between Jay and Ubis is 0.59. Overlapping area represents the amount of risk that can be diversified away by holding Jay Mart Public and Ubis Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ubis 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 Ubis Public. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ubis Public has no effect on the direction of Jay Mart i.e., Jay Mart and Ubis Public go up and down completely randomly.

Pair Corralation between Jay Mart and Ubis Public

Assuming the 90 days trading horizon Jay Mart Public is expected to generate 0.67 times more return on investment than Ubis Public. However, Jay Mart Public is 1.49 times less risky than Ubis Public. It trades about 0.03 of its potential returns per unit of risk. Ubis Public is currently generating about -0.11 per unit of risk. If you would invest  1,350  in Jay Mart Public on September 16, 2024 and sell it today you would earn a total of  10.00  from holding Jay Mart Public or generate 0.74% return on investment over 90 days.

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

Jay Mart Public  vs.  Ubis 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.

Ubis Public

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with Jay Mart and Ubis Public

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

The idea behind Jay Mart Public and Ubis 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 Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.