Correlation Between Johnson Outdoors and Life Clips

Can any of the company-specific risk be diversified away by investing in both Johnson Outdoors and Life Clips 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 Johnson Outdoors and Life Clips into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Johnson Outdoors and Life Clips, you can compare the effects of market volatilities on Johnson Outdoors and Life Clips 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 Johnson Outdoors with a short position of Life Clips. Check out your portfolio center. Please also check ongoing floating volatility patterns of Johnson Outdoors and Life Clips.

Diversification Opportunities for Johnson Outdoors and Life Clips

0.0

Correlation Coefficient

Johnson Outdoors  Life Clips

Pay attention - limited upside

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

Pair Corralation between Johnson Outdoors and Life Clips

If you would invest  0.01  in Life Clips on September 4, 2024 and sell it today you would earn a total of  0.00  from holding Life Clips or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	1.56%
Values	Daily Returns

Johnson Outdoors  vs.  Life Clips

Johnson Outdoors

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Johnson Outdoors has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest unfluctuating performance, the Stock's basic indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the firm private investors.

Life Clips

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Life Clips has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable essential indicators, Life Clips is not utilizing all of its potentials. The current stock price agitation, may contribute to short-term losses for the retail investors.

Pair Trading with Johnson Outdoors and Life Clips

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

The idea behind Johnson Outdoors and Life Clips 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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.