Correlation Between J Long and Software Acquisition
Can any of the company-specific risk be diversified away by investing in both J Long and Software Acquisition 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 J Long and Software Acquisition into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between J Long Group Limited and Software Acquisition Group, you can compare the effects of market volatilities on J Long and Software Acquisition 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 J Long with a short position of Software Acquisition. Check out your portfolio center. Please also check ongoing floating volatility patterns of J Long and Software Acquisition.
Diversification Opportunities for J Long and Software Acquisition
0.1 | Correlation Coefficient |
Average diversification
The 3 months correlation between J Long and Software is 0.1. Overlapping area represents the amount of risk that can be diversified away by holding J Long Group Limited and Software Acquisition Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Software Acquisition and J Long 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 J Long Group Limited are associated (or correlated) with Software Acquisition. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Software Acquisition has no effect on the direction of J Long i.e., J Long and Software Acquisition go up and down completely randomly.
Pair Corralation between J Long and Software Acquisition
Allowing for the 90-day total investment horizon J Long is expected to generate 3.77 times less return on investment than Software Acquisition. But when comparing it to its historical volatility, J Long Group Limited is 1.63 times less risky than Software Acquisition. It trades about 0.08 of its potential returns per unit of risk. Software Acquisition Group is currently generating about 0.18 of returns per unit of risk over similar time horizon. If you would invest 107.00 in Software Acquisition Group on May 31, 2025 and sell it today you would earn a total of 55.00 from holding Software Acquisition Group or generate 51.4% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
J Long Group Limited vs. Software Acquisition Group
Performance |
| Timeline |
| J Long Group |
| Software Acquisition |
J Long and Software Acquisition Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with J Long and Software Acquisition
The main advantage of trading using opposite J Long and Software Acquisition positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if J Long position performs unexpectedly, Software Acquisition 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 Software Acquisition will offset losses from the drop in Software Acquisition's long position.The idea behind J Long Group Limited and Software Acquisition Group 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.| Software Acquisition vs. Konoike Transport CoLtd | Software Acquisition vs. Adient PLC | Software Acquisition vs. BRP Inc | Software Acquisition vs. Barrick Mining |
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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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