Correlation Between Interface and James River

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

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

Diversification Opportunities for Interface and James River

0.49

Correlation Coefficient

Interface  James River

Very weak diversification

The 3 months correlation between Interface and James is 0.49. Overlapping area represents the amount of risk that can be diversified away by holding Interface and James River Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on James River Group and Interface 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 Interface are associated (or correlated) with James River. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of James River Group has no effect on the direction of Interface i.e., Interface and James River go up and down completely randomly.

Pair Corralation between Interface and James River

Given the investment horizon of 90 days Interface is expected to generate 2.37 times less return on investment than James River. But when comparing it to its historical volatility, Interface is 1.58 times less risky than James River. It trades about 0.07 of its potential returns per unit of risk. James River Group is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest  478.00  in James River Group on May 2, 2025 and sell it today you would earn a total of  89.00  from holding James River Group or generate 18.62% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	98.39%
Values	Daily Returns

Interface  vs.  James River Group

Interface

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Interface are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of rather conflicting essential indicators, Interface may actually be approaching a critical reversion point that can send shares even higher in August 2025.

James River Group

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in James River Group are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Even with relatively fragile basic indicators, James River reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Interface and James River

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

The idea behind Interface and James River Group 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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.