Correlation Between Daily Journal and Ebix

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

By analyzing existing cross correlation between Daily Journal Corp and Ebix Inc, you can compare the effects of market volatilities on Daily Journal and Ebix 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 Daily Journal with a short position of Ebix. Check out your portfolio center. Please also check ongoing floating volatility patterns of Daily Journal and Ebix.

Diversification Opportunities for Daily Journal and Ebix

-0.36

Correlation Coefficient

Daily Journal  Ebix

Very good diversification

The 3 months correlation between Daily and Ebix is -0.36. Overlapping area represents the amount of risk that can be diversified away by holding Daily Journal Corp and Ebix Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ebix Inc and Daily Journal 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 Daily Journal Corp are associated (or correlated) with Ebix. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ebix Inc has no effect on the direction of Daily Journal i.e., Daily Journal and Ebix go up and down completely randomly.

Pair Corralation between Daily Journal and Ebix

If you would invest  108.00  in Ebix Inc on January 28, 2024 and sell it today you would earn a total of  0.00  from holding Ebix Inc or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	4.55%
Values	Daily Returns

Daily Journal Corp  vs.  Ebix Inc

Daily Journal Corp

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Daily Journal Corp are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of very healthy fundamental indicators, Daily Journal is not utilizing all of its potentials. The current stock price disarray, may contribute to short-term losses for the investors.

Ebix Inc

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Ebix Inc has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of abnormal performance in the last few months, the Stock's forward indicators remain fairly strong which may send shares a bit higher in May 2024. The current disturbance may also be a sign of long term up-swing for the company investors.

Pair Trading with Daily Journal and Ebix

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

The idea behind Daily Journal Corp and Ebix Inc 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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.