Correlation Between CoreCard Corp and Daily Journal

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Can any of the company-specific risk be diversified away by investing in both CoreCard Corp and Daily Journal 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 CoreCard Corp and Daily Journal into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CoreCard Corp and Daily Journal Corp, you can compare the effects of market volatilities on CoreCard Corp and Daily Journal 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 CoreCard Corp with a short position of Daily Journal. Check out your portfolio center. Please also check ongoing floating volatility patterns of CoreCard Corp and Daily Journal.

Diversification Opportunities for CoreCard Corp and Daily Journal

0.64
  Correlation Coefficient

Poor diversification

The 3 months correlation between CoreCard and Daily is 0.64. Overlapping area represents the amount of risk that can be diversified away by holding CoreCard Corp and Daily Journal Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Daily Journal Corp and CoreCard Corp 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 CoreCard Corp are associated (or correlated) with Daily Journal. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Daily Journal Corp has no effect on the direction of CoreCard Corp i.e., CoreCard Corp and Daily Journal go up and down completely randomly.

Pair Corralation between CoreCard Corp and Daily Journal

Given the investment horizon of 90 days CoreCard Corp is expected to generate 1.68 times less return on investment than Daily Journal. In addition to that, CoreCard Corp is 1.19 times more volatile than Daily Journal Corp. It trades about 0.07 of its total potential returns per unit of risk. Daily Journal Corp is currently generating about 0.15 per unit of volatility. If you would invest  37,962  in Daily Journal Corp on August 9, 2024 and sell it today you would earn a total of  20,604  from holding Daily Journal Corp or generate 54.28% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthSignificant
Accuracy100.0%
ValuesDaily Returns

CoreCard Corp  vs.  Daily Journal Corp

 Performance 
       Timeline  
CoreCard Corp 

Risk-Adjusted Performance

16 of 100

 
Weak
 
Strong
Solid
Compared to the overall equity markets, risk-adjusted returns on investments in CoreCard Corp are ranked lower than 16 (%) of all global equities and portfolios over the last 90 days. In spite of rather inconsistent basic indicators, CoreCard Corp exhibited solid returns over the last few months and may actually be approaching a breakup point.
Daily Journal Corp 

Risk-Adjusted Performance

15 of 100

 
Weak
 
Strong
Good
Compared to the overall equity markets, risk-adjusted returns on investments in Daily Journal Corp are ranked lower than 15 (%) of all global equities and portfolios over the last 90 days. In spite of very conflicting fundamental indicators, Daily Journal displayed solid returns over the last few months and may actually be approaching a breakup point.

CoreCard Corp and Daily Journal Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with CoreCard Corp and Daily Journal

The main advantage of trading using opposite CoreCard Corp and Daily Journal positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CoreCard Corp position performs unexpectedly, Daily Journal 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 Daily Journal will offset losses from the drop in Daily Journal's long position.
The idea behind CoreCard Corp and Daily Journal Corp 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.
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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.

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