Correlation Between Jutal Offshore and Joby Aviation

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

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

Diversification Opportunities for Jutal Offshore and Joby Aviation

-0.24

Correlation Coefficient

Jutal Offshore  Joby Aviation

Very good diversification

The 3 months correlation between Jutal and Joby is -0.24. Overlapping area represents the amount of risk that can be diversified away by holding Jutal Offshore Oil and Joby Aviation in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Joby Aviation and Jutal Offshore 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 Jutal Offshore Oil are associated (or correlated) with Joby Aviation. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Joby Aviation has no effect on the direction of Jutal Offshore i.e., Jutal Offshore and Joby Aviation go up and down completely randomly.

Pair Corralation between Jutal Offshore and Joby Aviation

Assuming the 90 days horizon Jutal Offshore Oil is expected to generate 3.5 times more return on investment than Joby Aviation. However, Jutal Offshore is 3.5 times more volatile than Joby Aviation. It trades about 0.29 of its potential returns per unit of risk. Joby Aviation is currently generating about -0.06 per unit of risk. If you would invest  1,530  in Jutal Offshore Oil on February 28, 2024 and sell it today you would earn a total of  1,376  from holding Jutal Offshore Oil or generate 89.93% return on investment over 90 days.

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

Jutal Offshore Oil  vs.  Joby Aviation

Jutal Offshore Oil

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Jutal Offshore Oil are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. In spite of fairly unfluctuating basic indicators, Jutal Offshore showed solid returns over the last few months and may actually be approaching a breakup point.

Joby Aviation

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Joby Aviation has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest weak performance, the Stock's fundamental drivers remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

Pair Trading with Jutal Offshore and Joby Aviation

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

The idea behind Jutal Offshore Oil and Joby Aviation 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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.