Correlation Between Jb Financial and ATON

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

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

Diversification Opportunities for Jb Financial and ATON

0.54

Correlation Coefficient

Jb Financial  ATON

Very weak diversification

The 3 months correlation between 175330 and ATON is 0.54. Overlapping area represents the amount of risk that can be diversified away by holding Jb Financial and ATON Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ATON Inc 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 ATON. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ATON Inc has no effect on the direction of Jb Financial i.e., Jb Financial and ATON go up and down completely randomly.

Pair Corralation between Jb Financial and ATON

Assuming the 90 days trading horizon Jb Financial is expected to under-perform the ATON. But the stock apears to be less risky and, when comparing its historical volatility, Jb Financial is 2.0 times less risky than ATON. The stock trades about -0.2 of its potential returns per unit of risk. The ATON Inc is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest  585,000  in ATON Inc on September 21, 2024 and sell it today you would earn a total of  14,000  from holding ATON Inc or generate 2.39% return on investment over 90 days.

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

Jb Financial  vs.  ATON Inc

Jb Financial

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Jb Financial are ranked lower than 6 (%) 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.

ATON Inc

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in ATON Inc are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, ATON sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Jb Financial and ATON

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

The idea behind Jb Financial and ATON 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.

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 File Import module to quickly import all of your third-party portfolios from your local drive in csv format.