Correlation Between Journey Medical and Five Star
Can any of the company-specific risk be diversified away by investing in both Journey Medical and Five Star 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 Journey Medical and Five Star into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Journey Medical Corp and Five Star Bancorp, you can compare the effects of market volatilities on Journey Medical and Five Star 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 Journey Medical with a short position of Five Star. Check out your portfolio center. Please also check ongoing floating volatility patterns of Journey Medical and Five Star.
Diversification Opportunities for Journey Medical and Five Star
0.49 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Journey and Five is 0.49. Overlapping area represents the amount of risk that can be diversified away by holding Journey Medical Corp and Five Star Bancorp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Five Star Bancorp and Journey Medical 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 Journey Medical Corp are associated (or correlated) with Five Star. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Five Star Bancorp has no effect on the direction of Journey Medical i.e., Journey Medical and Five Star go up and down completely randomly.
Pair Corralation between Journey Medical and Five Star
Given the investment horizon of 90 days Journey Medical Corp is expected to generate 5.6 times more return on investment than Five Star. However, Journey Medical is 5.6 times more volatile than Five Star Bancorp. It trades about 0.11 of its potential returns per unit of risk. Five Star Bancorp is currently generating about -0.11 per unit of risk. If you would invest 292.00 in Journey Medical Corp on January 25, 2024 and sell it today you would earn a total of 48.00 from holding Journey Medical Corp or generate 16.44% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Journey Medical Corp vs. Five Star Bancorp
Performance |
| Timeline |
| Journey Medical Corp |
| Five Star Bancorp |
Journey Medical and Five Star Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Journey Medical and Five Star
The main advantage of trading using opposite Journey Medical and Five Star positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Journey Medical position performs unexpectedly, Five Star 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 Five Star will offset losses from the drop in Five Star's long position.| Journey Medical vs. Evoke Pharma | Journey Medical vs. Avadel Pharmaceuticals PLC | Journey Medical vs. Aquestive Therapeutics | Journey Medical vs. Cresco Labs |
| Five Star vs. Community West Bancshares | Five Star vs. HMN Financial | Five Star vs. First Northwest Bancorp | Five Star vs. Cullman Bancorp |
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 Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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