Correlation Between Jb Financial and Jinro Distillers

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

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

Diversification Opportunities for Jb Financial and Jinro Distillers

-0.03

Correlation Coefficient

Jb Financial  Jinro Distillers

Good diversification

The 3 months correlation between 175330 and Jinro is -0.03. Overlapping area represents the amount of risk that can be diversified away by holding Jb Financial and Jinro Distillers Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jinro Distillers and Jb Financial 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 Jb Financial are associated (or correlated) with Jinro Distillers. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jinro Distillers has no effect on the direction of Jb Financial i.e., Jb Financial and Jinro Distillers go up and down completely randomly.

Pair Corralation between Jb Financial and Jinro Distillers

Assuming the 90 days trading horizon Jb Financial is expected to generate 2.12 times more return on investment than Jinro Distillers. However, Jb Financial is 2.12 times more volatile than Jinro Distillers Co. It trades about 0.07 of its potential returns per unit of risk. Jinro Distillers Co is currently generating about 0.03 per unit of risk. If you would invest  1,531,000  in Jb Financial on September 28, 2024 and sell it today you would earn a total of  128,000  from holding Jb Financial or generate 8.36% return on investment over 90 days.

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

Jb Financial  vs.  Jinro Distillers Co

Jb Financial

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Jb Financial are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Jb Financial may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Jinro Distillers

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Jinro Distillers Co are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong basic indicators, Jinro Distillers is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Jb Financial and Jinro Distillers

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

The idea behind Jb Financial and Jinro Distillers Co 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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.