Correlation Between Hudbay Minerals and Jasper Therapeutics

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

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

Diversification Opportunities for Hudbay Minerals and Jasper Therapeutics

-0.5

Correlation Coefficient

Hudbay Minerals  Jasper Therapeutics

Very good diversification

The 3 months correlation between Hudbay and Jasper is -0.5. Overlapping area represents the amount of risk that can be diversified away by holding Hudbay Minerals and Jasper Therapeutics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jasper Therapeutics and Hudbay Minerals 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 Hudbay Minerals are associated (or correlated) with Jasper Therapeutics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jasper Therapeutics has no effect on the direction of Hudbay Minerals i.e., Hudbay Minerals and Jasper Therapeutics go up and down completely randomly.

Pair Corralation between Hudbay Minerals and Jasper Therapeutics

Considering the 90-day investment horizon Hudbay Minerals is expected to generate 1.07 times less return on investment than Jasper Therapeutics. In addition to that, Hudbay Minerals is 1.44 times more volatile than Jasper Therapeutics. It trades about 0.1 of its total potential returns per unit of risk. Jasper Therapeutics is currently generating about 0.15 per unit of volatility. If you would invest  2,244  in Jasper Therapeutics on March 7, 2024 and sell it today you would earn a total of  208.00  from holding Jasper Therapeutics or generate 9.27% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	95.45%
Values	Daily Returns

Hudbay Minerals  vs.  Jasper Therapeutics

Hudbay Minerals

Risk-Adjusted Performance

15 of 100

Good

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

Jasper Therapeutics

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Jasper Therapeutics has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable basic indicators, Jasper Therapeutics is not utilizing all of its potentials. The latest stock price agitation, may contribute to short-term losses for the retail investors.

Pair Trading with Hudbay Minerals and Jasper Therapeutics

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

The idea behind Hudbay Minerals and Jasper Therapeutics 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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.