Correlation Between QKC and JNT

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

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

Diversification Opportunities for QKC and JNT

-0.21

Correlation Coefficient

QKC  JNT

Very good diversification

The 3 months correlation between QKC and JNT is -0.21. Overlapping area represents the amount of risk that can be diversified away by holding QKC and JNT in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on JNT and QKC 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 QKC are associated (or correlated) with JNT. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of JNT has no effect on the direction of QKC i.e., QKC and JNT go up and down completely randomly.

Pair Corralation between QKC and JNT

If you would invest  9.27  in JNT on August 23, 2024 and sell it today you would earn a total of  0.00  from holding JNT or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	1.56%
Values	Daily Returns

QKC  vs.  JNT

QKC

Risk-Adjusted Performance

0 of 100

Very Weak

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

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.

Pair Trading with QKC and JNT

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

The idea behind QKC and JNT 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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..