Correlation Between JS Investments and Avanceon

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

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

Diversification Opportunities for JS Investments and Avanceon

0.45

Correlation Coefficient

JS Investments  Avanceon

Very weak diversification

The 3 months correlation between JSIL and Avanceon is 0.45. Overlapping area represents the amount of risk that can be diversified away by holding JS Investments and Avanceon in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Avanceon and JS Investments 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 Investments are associated (or correlated) with Avanceon. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Avanceon has no effect on the direction of JS Investments i.e., JS Investments and Avanceon go up and down completely randomly.

Pair Corralation between JS Investments and Avanceon

Assuming the 90 days trading horizon JS Investments is expected to generate 1.02 times more return on investment than Avanceon. However, JS Investments is 1.02 times more volatile than Avanceon. It trades about 0.17 of its potential returns per unit of risk. Avanceon is currently generating about 0.0 per unit of risk. If you would invest  2,155  in JS Investments on April 22, 2025 and sell it today you would earn a total of  645.00  from holding JS Investments or generate 29.93% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	88.52%
Values	Daily Returns

JS Investments  vs.  Avanceon

JS Investments

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in JS Investments are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, JS Investments sustained solid returns over the last few months and may actually be approaching a breakup point.

Avanceon

Risk-Adjusted Performance

Very Weak

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

Pair Trading with JS Investments and Avanceon

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

The idea behind JS Investments and Avanceon 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 Portfolio Anywhere module to track or share privately all of your investments from the convenience of any device.