Correlation Between Moonbae Steel and Jb Financial

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

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

Diversification Opportunities for Moonbae Steel and Jb Financial

0.07

Correlation Coefficient

Moonbae Steel  Jb Financial

Significant diversification

The 3 months correlation between Moonbae and 175330 is 0.07. Overlapping area represents the amount of risk that can be diversified away by holding Moonbae Steel and Jb Financial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jb Financial and Moonbae Steel 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 Moonbae Steel are associated (or correlated) with Jb Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jb Financial has no effect on the direction of Moonbae Steel i.e., Moonbae Steel and Jb Financial go up and down completely randomly.

Pair Corralation between Moonbae Steel and Jb Financial

Assuming the 90 days trading horizon Moonbae Steel is expected to generate 4.18 times less return on investment than Jb Financial. In addition to that, Moonbae Steel is 1.16 times more volatile than Jb Financial. It trades about 0.02 of its total potential returns per unit of risk. Jb Financial is currently generating about 0.1 per unit of volatility. If you would invest  1,528,655  in Jb Financial on September 18, 2024 and sell it today you would earn a total of  217,345  from holding Jb Financial or generate 14.22% return on investment over 90 days.

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

Moonbae Steel  vs.  Jb Financial

Moonbae Steel

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Moonbae Steel are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong basic indicators, Moonbae Steel is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Jb Financial

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Jb Financial are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Jb Financial sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Moonbae Steel and Jb Financial

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

The idea behind Moonbae Steel and Jb Financial 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.

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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.