Correlation Between JT ARCH and Photon Energy

Can any of the company-specific risk be diversified away by investing in both JT ARCH and Photon Energy 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 JT ARCH and Photon Energy into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between JT ARCH INVESTMENTS and Photon Energy NV, you can compare the effects of market volatilities on JT ARCH and Photon Energy 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 JT ARCH with a short position of Photon Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of JT ARCH and Photon Energy.

Diversification Opportunities for JT ARCH and Photon Energy

-0.93

Correlation Coefficient

JT ARCH  Photon Energy

Pay attention - limited upside

The 3 months correlation between JTINA and Photon is -0.93. Overlapping area represents the amount of risk that can be diversified away by holding JT ARCH INVESTMENTS and Photon Energy NV in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Photon Energy NV and JT ARCH 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 JT ARCH INVESTMENTS are associated (or correlated) with Photon Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Photon Energy NV has no effect on the direction of JT ARCH i.e., JT ARCH and Photon Energy go up and down completely randomly.

Pair Corralation between JT ARCH and Photon Energy

Assuming the 90 days trading horizon JT ARCH INVESTMENTS is expected to generate 0.07 times more return on investment than Photon Energy. However, JT ARCH INVESTMENTS is 15.29 times less risky than Photon Energy. It trades about 0.17 of its potential returns per unit of risk. Photon Energy NV is currently generating about -0.27 per unit of risk. If you would invest  167.00  in JT ARCH INVESTMENTS on September 12, 2024 and sell it today you would earn a total of  3.00  from holding JT ARCH INVESTMENTS or generate 1.8% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Significant
Accuracy	98.41%
Values	Daily Returns

JT ARCH INVESTMENTS  vs.  Photon Energy NV

JT ARCH INVESTMENTS

Risk-Adjusted Performance

13 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in JT ARCH INVESTMENTS are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. Even with relatively invariable basic indicators, JT ARCH is not utilizing all of its potentials. The latest stock price agitation, may contribute to short-term losses for the retail investors.

Photon Energy NV

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Photon Energy NV has generated negative risk-adjusted returns adding no value to investors with long positions. Even with weak performance in the last few months, the Stock's basic indicators remain relatively invariable which may send shares a bit higher in January 2025. The latest agitation may also be a sign of long-running up-swing for the enterprise retail investors.

Pair Trading with JT ARCH and Photon Energy

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

The idea behind JT ARCH INVESTMENTS and Photon Energy NV 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.

Check out your portfolio center.

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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.