Correlation Between Eisai Co and Jutal Offshore

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

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

Diversification Opportunities for Eisai Co and Jutal Offshore

0.0

Correlation Coefficient

Eisai Co  Jutal Offshore

Pay attention - limited upside

The 3 months correlation between Eisai and Jutal is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Eisai Co and Jutal Offshore Oil in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jutal Offshore Oil and Eisai Co 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 Eisai Co are associated (or correlated) with Jutal Offshore. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jutal Offshore Oil has no effect on the direction of Eisai Co i.e., Eisai Co and Jutal Offshore go up and down completely randomly.

Pair Corralation between Eisai Co and Jutal Offshore

If you would invest  1,530  in Jutal Offshore Oil on February 23, 2024 and sell it today you would earn a total of  895.00  from holding Jutal Offshore Oil or generate 58.5% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	2.33%
Values	Daily Returns

Eisai Co  vs.  Jutal Offshore Oil

Eisai Co

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Eisai Co has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly strong essential indicators, Eisai Co is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Jutal Offshore Oil

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Jutal Offshore Oil are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. In spite of fairly inconsistent basic indicators, Jutal Offshore showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Eisai Co and Jutal Offshore

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

The idea behind Eisai Co and Jutal Offshore Oil 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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.