Correlation Between Jadeart and Salvatore Ferragamo

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Can any of the company-specific risk be diversified away by investing in both Jadeart and Salvatore Ferragamo 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 Jadeart and Salvatore Ferragamo into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Jadeart Group and Salvatore Ferragamo SpA, you can compare the effects of market volatilities on Jadeart and Salvatore Ferragamo 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 Jadeart with a short position of Salvatore Ferragamo. Check out your portfolio center. Please also check ongoing floating volatility patterns of Jadeart and Salvatore Ferragamo.

Diversification Opportunities for Jadeart and Salvatore Ferragamo

0.17
  Correlation Coefficient

Average diversification

The 3 months correlation between Jadeart and Salvatore is 0.17. Overlapping area represents the amount of risk that can be diversified away by holding Jadeart Group and Salvatore Ferragamo SpA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Salvatore Ferragamo SpA and Jadeart 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 Jadeart Group are associated (or correlated) with Salvatore Ferragamo. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Salvatore Ferragamo SpA has no effect on the direction of Jadeart i.e., Jadeart and Salvatore Ferragamo go up and down completely randomly.

Pair Corralation between Jadeart and Salvatore Ferragamo

Given the investment horizon of 90 days Jadeart Group is expected to generate 10.27 times more return on investment than Salvatore Ferragamo. However, Jadeart is 10.27 times more volatile than Salvatore Ferragamo SpA. It trades about 0.02 of its potential returns per unit of risk. Salvatore Ferragamo SpA is currently generating about -0.25 per unit of risk. If you would invest  1.20  in Jadeart Group on December 30, 2023 and sell it today you would lose (0.19) from holding Jadeart Group or give up 15.83% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthInsignificant
Accuracy95.65%
ValuesDaily Returns

Jadeart Group  vs.  Salvatore Ferragamo SpA

 Performance 
       Timeline  
Jadeart Group 

Risk-Adjusted Performance

6 of 100

 
Low
 
High
Modest
Compared to the overall equity markets, risk-adjusted returns on investments in Jadeart Group are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak fundamental indicators, Jadeart sustained solid returns over the last few months and may actually be approaching a breakup point.
Salvatore Ferragamo SpA 

Risk-Adjusted Performance

0 of 100

 
Low
 
High
Very Weak
Over the last 90 days Salvatore Ferragamo SpA has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly strong technical and fundamental indicators, Salvatore Ferragamo is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Jadeart and Salvatore Ferragamo Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Jadeart and Salvatore Ferragamo

The main advantage of trading using opposite Jadeart and Salvatore Ferragamo positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Jadeart position performs unexpectedly, Salvatore Ferragamo 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 Salvatore Ferragamo will offset losses from the drop in Salvatore Ferragamo's long position.
The idea behind Jadeart Group and Salvatore Ferragamo SpA 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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.

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