Correlation Between Jb Financial and Mobile Appliance

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

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

Diversification Opportunities for Jb Financial and Mobile Appliance

-0.5

Correlation Coefficient

Jb Financial  Mobile Appliance

Very good diversification

The 3 months correlation between 175330 and Mobile is -0.5. Overlapping area represents the amount of risk that can be diversified away by holding Jb Financial and Mobile Appliance in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mobile Appliance 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 Mobile Appliance. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mobile Appliance has no effect on the direction of Jb Financial i.e., Jb Financial and Mobile Appliance go up and down completely randomly.

Pair Corralation between Jb Financial and Mobile Appliance

Assuming the 90 days trading horizon Jb Financial is expected to generate 0.66 times more return on investment than Mobile Appliance. However, Jb Financial is 1.51 times less risky than Mobile Appliance. It trades about 0.25 of its potential returns per unit of risk. Mobile Appliance is currently generating about -0.02 per unit of risk. If you would invest  1,418,401  in Jb Financial on September 3, 2024 and sell it today you would earn a total of  549,599  from holding Jb Financial or generate 38.75% return on investment over 90 days.

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

Jb Financial  vs.  Mobile Appliance

Jb Financial

Risk-Adjusted Performance

19 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Jb Financial are ranked lower than 19 (%) 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.

Mobile Appliance

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Mobile Appliance has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, Mobile Appliance 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 Mobile Appliance

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

The idea behind Jb Financial and Mobile Appliance 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 Portfolio Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.