Correlation Between Jito and Audius

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

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

Diversification Opportunities for Jito and Audius

0.83

Correlation Coefficient

Jito  Audius

Very poor diversification

The 3 months correlation between Jito and Audius is 0.83. Overlapping area represents the amount of risk that can be diversified away by holding Jito and Audius in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Audius and Jito 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 Jito are associated (or correlated) with Audius. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Audius has no effect on the direction of Jito i.e., Jito and Audius go up and down completely randomly.

Pair Corralation between Jito and Audius

Assuming the 90 days trading horizon Jito is expected to generate 1.38 times more return on investment than Audius. However, Jito is 1.38 times more volatile than Audius. It trades about 0.15 of its potential returns per unit of risk. Audius is currently generating about 0.14 per unit of risk. If you would invest  217.00  in Jito on September 3, 2024 and sell it today you would earn a total of  153.00  from holding Jito or generate 70.51% return on investment over 90 days.

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

Jito  vs.  Audius

Jito

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Jito are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady basic indicators, Jito exhibited solid returns over the last few months and may actually be approaching a breakup point.

Audius

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Audius are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady fundamental indicators, Audius exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Jito and Audius

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

The idea behind Jito and Audius 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 Money Managers module to screen money managers from public funds and ETFs managed around the world.