Correlation Between JPX Global and Stericycle

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

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

Diversification Opportunities for JPX Global and Stericycle

-0.35

Correlation Coefficient

JPX Global  Stericycle

Very good diversification

The 3 months correlation between JPX and Stericycle is -0.35. Overlapping area represents the amount of risk that can be diversified away by holding JPX Global and Stericycle in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Stericycle and JPX Global 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 JPX Global are associated (or correlated) with Stericycle. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Stericycle has no effect on the direction of JPX Global i.e., JPX Global and Stericycle go up and down completely randomly.

Pair Corralation between JPX Global and Stericycle

Given the investment horizon of 90 days JPX Global is expected to generate 8.74 times more return on investment than Stericycle. However, JPX Global is 8.74 times more volatile than Stericycle. It trades about 0.07 of its potential returns per unit of risk. Stericycle is currently generating about 0.06 per unit of risk. If you would invest  0.05  in JPX Global on January 24, 2024 and sell it today you would earn a total of  0.00  from holding JPX Global or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

JPX Global  vs.  Stericycle

JPX Global

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in JPX Global are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of fairly weak technical and fundamental indicators, JPX Global may actually be approaching a critical reversion point that can send shares even higher in May 2024.

Stericycle

Risk-Adjusted Performance

3 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Stericycle are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite quite persistent fundamental indicators, Stericycle is not utilizing all of its potentials. The newest stock price mess, may contribute to short-term losses for the institutional investors.

Pair Trading with JPX Global and Stericycle

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

The idea behind JPX Global and Stericycle 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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.