Correlation Between Papa Johns and SEGRO Plc

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

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

Diversification Opportunities for Papa Johns and SEGRO Plc

-0.37

Correlation Coefficient

Papa Johns  SEGRO Plc

Very good diversification

The 3 months correlation between Papa and SEGRO is -0.37. Overlapping area represents the amount of risk that can be diversified away by holding Papa Johns International and SEGRO Plc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SEGRO Plc and Papa Johns 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 Papa Johns International are associated (or correlated) with SEGRO Plc. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SEGRO Plc has no effect on the direction of Papa Johns i.e., Papa Johns and SEGRO Plc go up and down completely randomly.

Pair Corralation between Papa Johns and SEGRO Plc

Assuming the 90 days horizon Papa Johns International is expected to under-perform the SEGRO Plc. In addition to that, Papa Johns is 1.17 times more volatile than SEGRO Plc. It trades about -0.13 of its total potential returns per unit of risk. SEGRO Plc is currently generating about 0.03 per unit of volatility. If you would invest  920.00  in SEGRO Plc on September 5, 2024 and sell it today you would earn a total of  10.00  from holding SEGRO Plc or generate 1.09% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	95.65%
Values	Daily Returns

Papa Johns International  vs.  SEGRO Plc

Papa Johns International

Risk-Adjusted Performance

3 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Papa Johns International are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Papa Johns may actually be approaching a critical reversion point that can send shares even higher in January 2025.

SEGRO Plc

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days SEGRO Plc has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest fragile performance, the Stock's basic indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.

Pair Trading with Papa Johns and SEGRO Plc

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

The idea behind Papa Johns International and SEGRO Plc 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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.