Correlation Between Jushi Holdings and Holloman Energy

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

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

Diversification Opportunities for Jushi Holdings and Holloman Energy

0.55

Correlation Coefficient

Jushi Holdings  Holloman Energy

Very weak diversification

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

Pair Corralation between Jushi Holdings and Holloman Energy

Assuming the 90 days horizon Jushi Holdings is expected to generate 0.89 times more return on investment than Holloman Energy. However, Jushi Holdings is 1.12 times less risky than Holloman Energy. It trades about 0.01 of its potential returns per unit of risk. Holloman Energy Corp is currently generating about -0.11 per unit of risk. If you would invest  77.00  in Jushi Holdings on February 3, 2024 and sell it today you would lose (5.00) from holding Jushi Holdings or give up 6.49% of portfolio value over 90 days.

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

Jushi Holdings  vs.  Holloman Energy Corp

Jushi Holdings

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Jushi Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable technical indicators, Jushi Holdings is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Holloman Energy Corp

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Holloman Energy Corp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of uncertain performance in the last few months, the Stock's basic indicators remain rather sound which may send shares a bit higher in June 2024. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

Pair Trading with Jushi Holdings and Holloman Energy

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

The idea behind Jushi Holdings and Holloman Energy Corp 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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..