Correlation Between John Wiley and Gannett

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

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

Diversification Opportunities for John Wiley and Gannett

0.44

Correlation Coefficient

John Wiley  Gannett

Very weak diversification

The 3 months correlation between John and Gannett is 0.44. Overlapping area represents the amount of risk that can be diversified away by holding John Wiley Sons and Gannett Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gannett and John Wiley 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 John Wiley Sons are associated (or correlated) with Gannett. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gannett has no effect on the direction of John Wiley i.e., John Wiley and Gannett go up and down completely randomly.

Pair Corralation between John Wiley and Gannett

Considering the 90-day investment horizon John Wiley Sons is expected to generate 0.39 times more return on investment than Gannett. However, John Wiley Sons is 2.57 times less risky than Gannett. It trades about 0.09 of its potential returns per unit of risk. Gannett Co is currently generating about 0.01 per unit of risk. If you would invest  4,797  in John Wiley Sons on August 30, 2024 and sell it today you would earn a total of  445.00  from holding John Wiley Sons or generate 9.28% return on investment over 90 days.

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

John Wiley Sons  vs.  Gannett Co

John Wiley Sons

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in John Wiley Sons are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of fairly fragile essential indicators, John Wiley may actually be approaching a critical reversion point that can send shares even higher in December 2024.

Gannett

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Gannett Co has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fairly strong fundamental indicators, Gannett is not utilizing all of its potentials. The recent stock price confusion, may contribute to short-horizon losses for the traders.

Pair Trading with John Wiley and Gannett

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

The idea behind John Wiley Sons and Gannett Co 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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.