Correlation Between Rational/pier and Jacob Small

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

By analyzing existing cross correlation between Rationalpier 88 Convertible and Jacob Small Cap, you can compare the effects of market volatilities on Rational/pier and Jacob Small 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 Rational/pier with a short position of Jacob Small. Check out your portfolio center. Please also check ongoing floating volatility patterns of Rational/pier and Jacob Small.

Diversification Opportunities for Rational/pier and Jacob Small

0.73

Correlation Coefficient

Rational/pier  Jacob Small

Poor diversification

The 3 months correlation between Rational/pier and Jacob is 0.73. Overlapping area represents the amount of risk that can be diversified away by holding Rationalpier 88 Convertible and Jacob Small Cap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jacob Small Cap and Rational/pier 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 Rationalpier 88 Convertible are associated (or correlated) with Jacob Small. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jacob Small Cap has no effect on the direction of Rational/pier i.e., Rational/pier and Jacob Small go up and down completely randomly.

Pair Corralation between Rational/pier and Jacob Small

Assuming the 90 days horizon Rational/pier is expected to generate 16.72 times less return on investment than Jacob Small. But when comparing it to its historical volatility, Rationalpier 88 Convertible is 4.81 times less risky than Jacob Small. It trades about 0.07 of its potential returns per unit of risk. Jacob Small Cap is currently generating about 0.25 of returns per unit of risk over similar time horizon. If you would invest  2,220  in Jacob Small Cap on July 1, 2025 and sell it today you would earn a total of  683.00  from holding Jacob Small Cap or generate 30.77% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	100.0%
Values	Daily Returns

Rationalpier 88 Convertible  vs.  Jacob Small Cap

Rationalpier 88 Conv

Risk-Adjusted Performance

Mild

Compared to the overall equity markets, risk-adjusted returns on investments in Rationalpier 88 Convertible are ranked lower than 5 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong forward indicators, Rational/pier is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Jacob Small Cap

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Jacob Small Cap are ranked lower than 20 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak technical and fundamental indicators, Jacob Small showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Rational/pier and Jacob Small

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

The idea behind Rationalpier 88 Convertible and Jacob Small Cap 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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..