Correlation Between JS Global and Matco Foods

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

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

Diversification Opportunities for JS Global and Matco Foods

0.86

Correlation Coefficient

JS Global  Matco Foods

Very poor diversification

The 3 months correlation between JSGBETF and Matco is 0.86. Overlapping area represents the amount of risk that can be diversified away by holding JS Global Banking and Matco Foods in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Matco Foods and JS 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 JS Global Banking are associated (or correlated) with Matco Foods. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Matco Foods has no effect on the direction of JS Global i.e., JS Global and Matco Foods go up and down completely randomly.

Pair Corralation between JS Global and Matco Foods

Assuming the 90 days trading horizon JS Global Banking is expected to generate 0.82 times more return on investment than Matco Foods. However, JS Global Banking is 1.22 times less risky than Matco Foods. It trades about 0.17 of its potential returns per unit of risk. Matco Foods is currently generating about 0.1 per unit of risk. If you would invest  2,150  in JS Global Banking on April 23, 2025 and sell it today you would earn a total of  826.00  from holding JS Global Banking or generate 38.42% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Strong
Accuracy	96.72%
Values	Daily Returns

JS Global Banking  vs.  Matco Foods

JS Global Banking

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in JS Global Banking are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. Despite nearly conflicting technical and fundamental indicators, JS Global reported solid returns over the last few months and may actually be approaching a breakup point.

Matco Foods

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Matco Foods are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Even with relatively fragile basic indicators, Matco Foods reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with JS Global and Matco Foods

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

The idea behind JS Global Banking and Matco Foods 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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.