Correlation Between Primaris Retail and Jade Leader

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

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

Diversification Opportunities for Primaris Retail and Jade Leader

-0.11

Correlation Coefficient

Primaris Retail  Jade Leader

Good diversification

The 3 months correlation between Primaris and Jade is -0.11. Overlapping area represents the amount of risk that can be diversified away by holding Primaris Retail RE and Jade Leader Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jade Leader Corp and Primaris Retail 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 Primaris Retail RE are associated (or correlated) with Jade Leader. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jade Leader Corp has no effect on the direction of Primaris Retail i.e., Primaris Retail and Jade Leader go up and down completely randomly.

Pair Corralation between Primaris Retail and Jade Leader

Assuming the 90 days trading horizon Primaris Retail RE is expected to generate 0.13 times more return on investment than Jade Leader. However, Primaris Retail RE is 7.72 times less risky than Jade Leader. It trades about 0.01 of its potential returns per unit of risk. Jade Leader Corp is currently generating about -0.03 per unit of risk. If you would invest  1,584  in Primaris Retail RE on September 23, 2024 and sell it today you would earn a total of  0.00  from holding Primaris Retail RE or generate 0.0% return on investment over 90 days.

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

Primaris Retail RE  vs.  Jade Leader Corp

Primaris Retail RE

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Primaris Retail RE has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, Primaris Retail is not utilizing all of its potentials. The newest stock price disturbance, may contribute to short-term losses for the investors.

Jade Leader Corp

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Jade Leader Corp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unfluctuating performance in the last few months, the Stock's fundamental indicators remain fairly stable which may send shares a bit higher in January 2025. The latest fuss may also be a sign of long-term up-swing for the venture sophisticated investors.

Pair Trading with Primaris Retail and Jade Leader

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

The idea behind Primaris Retail RE and Jade Leader Corp 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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.