Correlation Between JTC PLC and Exponent

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Can any of the company-specific risk be diversified away by investing in both JTC PLC and Exponent 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 JTC PLC and Exponent into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between JTC PLC and Exponent, you can compare the effects of market volatilities on JTC PLC and Exponent 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 JTC PLC with a short position of Exponent. Check out your portfolio center. Please also check ongoing floating volatility patterns of JTC PLC and Exponent.

Diversification Opportunities for JTC PLC and Exponent

-0.45
  Correlation Coefficient

Very good diversification

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

Pair Corralation between JTC PLC and Exponent

Assuming the 90 days trading horizon JTC PLC is expected to under-perform the Exponent. But the stock apears to be less risky and, when comparing its historical volatility, JTC PLC is 1.25 times less risky than Exponent. The stock trades about -0.15 of its potential returns per unit of risk. The Exponent is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest  6,896  in Exponent on August 24, 2025 and sell it today you would earn a total of  167.00  from holding Exponent or generate 2.42% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthVery Weak
Accuracy95.65%
ValuesDaily Returns

JTC PLC  vs.  Exponent

 Performance 
       Timeline  
JTC PLC 

Risk-Adjusted Performance

Good

 
Weak
 
Strong
Compared to the overall equity markets, risk-adjusted returns on investments in JTC PLC are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady technical and fundamental indicators, JTC PLC exhibited solid returns over the last few months and may actually be approaching a breakup point.
Exponent 

Risk-Adjusted Performance

Weakest

 
Weak
 
Strong
Over the last 90 days Exponent has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy basic indicators, Exponent is not utilizing all of its potentials. The latest stock price disarray, may contribute to short-term losses for the investors.

JTC PLC and Exponent Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with JTC PLC and Exponent

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

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