Correlation Between John Marshall and AbcamPLC

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

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

Diversification Opportunities for John Marshall and AbcamPLC

-0.55

Correlation Coefficient

John Marshall  AbcamPLC

Excellent diversification

The 3 months correlation between John and AbcamPLC is -0.55. Overlapping area represents the amount of risk that can be diversified away by holding John Marshall Bancorp and AbcamPLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AbcamPLC and John Marshall 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 John Marshall Bancorp are associated (or correlated) with AbcamPLC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AbcamPLC has no effect on the direction of John Marshall i.e., John Marshall and AbcamPLC go up and down completely randomly.

Pair Corralation between John Marshall and AbcamPLC

If you would invest  2,399  in AbcamPLC on January 26, 2024 and sell it today you would earn a total of  0.00  from holding AbcamPLC or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	4.76%
Values	Daily Returns

John Marshall Bancorp  vs.  AbcamPLC

John Marshall Bancorp

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days John Marshall Bancorp has generated negative risk-adjusted returns adding no value to investors with long positions. Despite unsteady performance in the last few months, the Stock's basic indicators remain somewhat strong which may send shares a bit higher in May 2024. The current disturbance may also be a sign of long term up-swing for the company investors.

AbcamPLC

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days AbcamPLC has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy fundamental indicators, AbcamPLC is not utilizing all of its potentials. The current stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with John Marshall and AbcamPLC

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

The idea behind John Marshall Bancorp and AbcamPLC 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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.