Correlation Between Jaguar Animal and Ibio

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

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

Diversification Opportunities for Jaguar Animal and Ibio

0.23

Correlation Coefficient

Jaguar Animal  Ibio

Modest diversification

The 3 months correlation between Jaguar and Ibio is 0.23. Overlapping area represents the amount of risk that can be diversified away by holding Jaguar Animal Health and Ibio Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ibio Inc and Jaguar Animal 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 Jaguar Animal Health are associated (or correlated) with Ibio. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ibio Inc has no effect on the direction of Jaguar Animal i.e., Jaguar Animal and Ibio go up and down completely randomly.

Pair Corralation between Jaguar Animal and Ibio

Given the investment horizon of 90 days Jaguar Animal Health is expected to generate 0.69 times more return on investment than Ibio. However, Jaguar Animal Health is 1.45 times less risky than Ibio. It trades about 0.03 of its potential returns per unit of risk. Ibio Inc is currently generating about 0.01 per unit of risk. If you would invest  46.00  in Jaguar Animal Health on February 17, 2024 and sell it today you would lose (17.30) from holding Jaguar Animal Health or give up 37.61% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	99.19%
Values	Daily Returns

Jaguar Animal Health  vs.  Ibio Inc

Jaguar Animal Health

Risk-Adjusted Performance

16 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Jaguar Animal Health are ranked lower than 16 (%) of all global equities and portfolios over the last 90 days. In spite of fairly weak technical and fundamental indicators, Jaguar Animal showed solid returns over the last few months and may actually be approaching a breakup point.

Ibio Inc

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Ibio Inc are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of very weak forward indicators, Ibio displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Jaguar Animal and Ibio

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

The idea behind Jaguar Animal Health and Ibio Inc 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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.