Correlation Between Palomar Holdings and JMU

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

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

Diversification Opportunities for Palomar Holdings and JMU

0.0

Correlation Coefficient

Palomar Holdings  JMU

Pay attention - limited upside

The 3 months correlation between Palomar and JMU is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Palomar Holdings and JMU Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on JMU Limited and Palomar Holdings 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 Palomar Holdings are associated (or correlated) with JMU. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of JMU Limited has no effect on the direction of Palomar Holdings i.e., Palomar Holdings and JMU go up and down completely randomly.

Pair Corralation between Palomar Holdings and JMU

If you would invest  7,517  in Palomar Holdings on January 28, 2024 and sell it today you would earn a total of  433.00  from holding Palomar Holdings or generate 5.76% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

Palomar Holdings  vs.  JMU Limited

Palomar Holdings

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Palomar Holdings are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. Even with relatively weak primary indicators, Palomar Holdings reported solid returns over the last few months and may actually be approaching a breakup point.

JMU Limited

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days JMU Limited has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable primary indicators, JMU is not utilizing all of its potentials. The recent stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Palomar Holdings and JMU

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

The idea behind Palomar Holdings and JMU Limited 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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.