Correlation Between Jones Soda and NOHO

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

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

Diversification Opportunities for Jones Soda and NOHO

-0.05

Correlation Coefficient

Jones Soda  NOHO

Good diversification

The 3 months correlation between Jones and NOHO is -0.05. Overlapping area represents the amount of risk that can be diversified away by holding Jones Soda Co and NOHO Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NOHO Inc and Jones Soda 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 Jones Soda Co are associated (or correlated) with NOHO. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NOHO Inc has no effect on the direction of Jones Soda i.e., Jones Soda and NOHO go up and down completely randomly.

Pair Corralation between Jones Soda and NOHO

Given the investment horizon of 90 days Jones Soda Co is expected to under-perform the NOHO. But the otc stock apears to be less risky and, when comparing its historical volatility, Jones Soda Co is 5.52 times less risky than NOHO. The otc stock trades about -0.03 of its potential returns per unit of risk. The NOHO Inc is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest  0.03  in NOHO Inc on July 10, 2025 and sell it today you would lose (0.01) from holding NOHO Inc or give up 33.33% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	98.44%
Values	Daily Returns

Jones Soda Co  vs.  NOHO Inc

Jones Soda

Risk-Adjusted Performance

Weakest

Over the last 90 days Jones Soda Co has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong fundamental indicators, Jones Soda is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

NOHO Inc

Risk-Adjusted Performance

Mild

Compared to the overall equity markets, risk-adjusted returns on investments in NOHO Inc are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite quite unfluctuating basic indicators, NOHO disclosed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Jones Soda and NOHO

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

The idea behind Jones Soda Co and NOHO 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.

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 Transaction History module to view history of all your transactions and understand their impact on performance.