Correlation Between ADT and JA Solar
Can any of the company-specific risk be diversified away by investing in both ADT and JA Solar 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 ADT and JA Solar into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ADT Inc and JA Solar Holdings, you can compare the effects of market volatilities on ADT and JA Solar 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 ADT with a short position of JA Solar. Check out your portfolio center. Please also check ongoing floating volatility patterns of ADT and JA Solar.
Diversification Opportunities for ADT and JA Solar
Pay attention - limited upside
The 3 months correlation between ADT and JASO is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding ADT Inc and JA Solar Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on JA Solar Holdings and ADT 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 ADT Inc are associated (or correlated) with JA Solar. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of JA Solar Holdings has no effect on the direction of ADT i.e., ADT and JA Solar go up and down completely randomly.
Pair Corralation between ADT and JA Solar
If you would invest (100.00) in JA Solar Holdings on January 26, 2024 and sell it today you would earn a total of 100.00 from holding JA Solar Holdings or generate -100.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 0.0% |
| Values | Daily Returns |
ADT Inc vs. JA Solar Holdings
Performance |
| Timeline |
| ADT Inc |
| JA Solar Holdings |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
ADT and JA Solar Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ADT and JA Solar
The main advantage of trading using opposite ADT and JA Solar positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ADT position performs unexpectedly, JA Solar 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 JA Solar will offset losses from the drop in JA Solar's long position.The idea behind ADT Inc and JA Solar Holdings 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.| JA Solar vs. Noble plc | JA Solar vs. Direct Line Insurance | JA Solar vs. Tenaris SA ADR | JA Solar vs. BioNTech SE |
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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
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