Correlation Between Post and IDJ FINANCIAL

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

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

Diversification Opportunities for Post and IDJ FINANCIAL

0.78

Correlation Coefficient

Post  IDJ FINANCIAL

Poor diversification

The 3 months correlation between Post and IDJ is 0.78. Overlapping area represents the amount of risk that can be diversified away by holding Post and Telecommunications and IDJ FINANCIAL in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on IDJ FINANCIAL and Post 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 Post and Telecommunications are associated (or correlated) with IDJ FINANCIAL. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of IDJ FINANCIAL has no effect on the direction of Post i.e., Post and IDJ FINANCIAL go up and down completely randomly.

Pair Corralation between Post and IDJ FINANCIAL

Assuming the 90 days trading horizon Post is expected to generate 2.78 times less return on investment than IDJ FINANCIAL. But when comparing it to its historical volatility, Post and Telecommunications is 1.64 times less risky than IDJ FINANCIAL. It trades about 0.16 of its potential returns per unit of risk. IDJ FINANCIAL is currently generating about 0.27 of returns per unit of risk over similar time horizon. If you would invest  420,000  in IDJ FINANCIAL on May 5, 2025 and sell it today you would earn a total of  350,000  from holding IDJ FINANCIAL or generate 83.33% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	98.48%
Values	Daily Returns

Post and Telecommunications  vs.  IDJ FINANCIAL

Post and Telecommuni

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Post and Telecommunications are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating fundamental indicators, Post displayed solid returns over the last few months and may actually be approaching a breakup point.

IDJ FINANCIAL

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in IDJ FINANCIAL are ranked lower than 21 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating forward-looking indicators, IDJ FINANCIAL displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Post and IDJ FINANCIAL

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

The idea behind Post and Telecommunications and IDJ FINANCIAL 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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.