Correlation Between Rocky Brands and J Long

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

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

Diversification Opportunities for Rocky Brands and J Long

0.07

Correlation Coefficient

Rocky Brands  J Long

Significant diversification

The 3 months correlation between Rocky and J Long is 0.07. Overlapping area represents the amount of risk that can be diversified away by holding Rocky Brands and J Long Group Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on J Long Group and Rocky Brands 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 Rocky Brands are associated (or correlated) with J Long. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of J Long Group has no effect on the direction of Rocky Brands i.e., Rocky Brands and J Long go up and down completely randomly.

Pair Corralation between Rocky Brands and J Long

Given the investment horizon of 90 days Rocky Brands is expected to under-perform the J Long. But the stock apears to be less risky and, when comparing its historical volatility, Rocky Brands is 3.06 times less risky than J Long. The stock trades about -0.13 of its potential returns per unit of risk. The J Long Group Limited is currently generating about -0.02 of returns per unit of risk over similar time horizon. If you would invest  47.00  in J Long Group Limited on August 29, 2024 and sell it today you would lose (15.00) from holding J Long Group Limited or give up 31.91% of portfolio value over 90 days.

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

Rocky Brands  vs.  J Long Group Limited

Rocky Brands

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Rocky Brands has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unfluctuating performance in the last few months, the Stock's forward-looking signals remain fairly strong which may send shares a bit higher in December 2024. The current disturbance may also be a sign of long term up-swing for the company investors.

J Long Group

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days J Long Group Limited has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent essential indicators, J Long is not utilizing all of its potentials. The latest stock price mess, may contribute to short-term losses for the institutional investors.

Pair Trading with Rocky Brands and J Long

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

The idea behind Rocky Brands and J Long Group Limited 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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.