Correlation Between JNT and Centrifuge

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

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

Diversification Opportunities for JNT and Centrifuge

0.19

Correlation Coefficient

JNT  Centrifuge

Average diversification

The 3 months correlation between JNT and Centrifuge is 0.19. Overlapping area represents the amount of risk that can be diversified away by holding JNT and Centrifuge in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Centrifuge and JNT 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 JNT are associated (or correlated) with Centrifuge. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Centrifuge has no effect on the direction of JNT i.e., JNT and Centrifuge go up and down completely randomly.

Pair Corralation between JNT and Centrifuge

If you would invest  32.00  in Centrifuge on September 4, 2024 and sell it today you would earn a total of  9.00  from holding Centrifuge or generate 28.13% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	1.54%
Values	Daily Returns

JNT  vs.  Centrifuge

JNT

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days JNT has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound basic indicators, JNT is not utilizing all of its potentials. The latest stock price tumult, may contribute to shorter-term losses for the shareholders.

Centrifuge

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Centrifuge are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady technical and fundamental indicators, Centrifuge exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with JNT and Centrifuge

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

The idea behind JNT and Centrifuge 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.

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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.