Correlation Between Jb Financial and Foodnamoo

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

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

Diversification Opportunities for Jb Financial and Foodnamoo

-0.71

Correlation Coefficient

Jb Financial  Foodnamoo

Pay attention - limited upside

The 3 months correlation between 175330 and Foodnamoo is -0.71. Overlapping area represents the amount of risk that can be diversified away by holding Jb Financial and Foodnamoo in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Foodnamoo 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 Foodnamoo. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Foodnamoo has no effect on the direction of Jb Financial i.e., Jb Financial and Foodnamoo go up and down completely randomly.

Pair Corralation between Jb Financial and Foodnamoo

Assuming the 90 days trading horizon Jb Financial is expected to generate 0.55 times more return on investment than Foodnamoo. However, Jb Financial is 1.81 times less risky than Foodnamoo. It trades about 0.13 of its potential returns per unit of risk. Foodnamoo is currently generating about 0.02 per unit of risk. If you would invest  1,528,655  in Jb Financial on September 14, 2024 and sell it today you would earn a total of  276,345  from holding Jb Financial or generate 18.08% return on investment over 90 days.

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

Jb Financial  vs.  Foodnamoo

Jb Financial

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Jb Financial are ranked lower than 10 (%) 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.

Foodnamoo

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Foodnamoo are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong basic indicators, Foodnamoo 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 Foodnamoo

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

The idea behind Jb Financial and Foodnamoo 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 File Import module to quickly import all of your third-party portfolios from your local drive in csv format.