Correlation Between Seaboard and JSC National

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

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

Diversification Opportunities for Seaboard and JSC National

-0.74

Correlation Coefficient

Seaboard  JSC National

Pay attention - limited upside

The 3 months correlation between Seaboard and JSC is -0.74. Overlapping area represents the amount of risk that can be diversified away by holding Seaboard and JSC National Atomic in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on JSC National Atomic and Seaboard 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 Seaboard are associated (or correlated) with JSC National. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of JSC National Atomic has no effect on the direction of Seaboard i.e., Seaboard and JSC National go up and down completely randomly.

Pair Corralation between Seaboard and JSC National

Assuming the 90 days horizon Seaboard is expected to under-perform the JSC National. But the stock apears to be less risky and, when comparing its historical volatility, Seaboard is 1.67 times less risky than JSC National. The stock trades about -0.16 of its potential returns per unit of risk. The JSC National Atomic is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest  3,260  in JSC National Atomic on September 19, 2024 and sell it today you would earn a total of  330.00  from holding JSC National Atomic or generate 10.12% return on investment over 90 days.

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

Seaboard  vs.  JSC National Atomic

Seaboard

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Seaboard has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fragile performance in the last few months, the Stock's basic indicators remain nearly stable which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

JSC National Atomic

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in JSC National Atomic are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, JSC National may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Seaboard and JSC National

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

The idea behind Seaboard and JSC National Atomic 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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.