Correlation Between J W and Rafael Holdings

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

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

Diversification Opportunities for J W and Rafael Holdings

-0.01

Correlation Coefficient

J W  Rafael Holdings

Good diversification

The 3 months correlation between MAYS and Rafael is -0.01. Overlapping area represents the amount of risk that can be diversified away by holding J W Mays and Rafael Holdings Class in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Rafael Holdings Class and J W 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 J W Mays are associated (or correlated) with Rafael Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Rafael Holdings Class has no effect on the direction of J W i.e., J W and Rafael Holdings go up and down completely randomly.

Pair Corralation between J W and Rafael Holdings

Given the investment horizon of 90 days J W Mays is expected to generate 50.79 times more return on investment than Rafael Holdings. However, J W is 50.79 times more volatile than Rafael Holdings Class. It trades about 0.14 of its potential returns per unit of risk. Rafael Holdings Class is currently generating about 0.08 per unit of risk. If you would invest  4,300  in J W Mays on September 15, 2024 and sell it today you would earn a total of  50.00  from holding J W Mays or generate 1.16% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	33.33%
Values	Daily Returns

J W Mays  vs.  Rafael Holdings Class

J W Mays

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days J W Mays has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, J W is not utilizing all of its potentials. The current stock price uproar, may contribute to short-horizon losses for the private investors.

Rafael Holdings Class

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Rafael Holdings Class are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite quite unfluctuating technical and fundamental indicators, Rafael Holdings disclosed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with J W and Rafael Holdings

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

The idea behind J W Mays and Rafael Holdings Class 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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.