Correlation Between JB Hi and COG Financial
Can any of the company-specific risk be diversified away by investing in both JB Hi and COG 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 JB Hi and COG Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between JB Hi Fi and COG Financial Services, you can compare the effects of market volatilities on JB Hi and COG 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 JB Hi with a short position of COG Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of JB Hi and COG Financial.
Diversification Opportunities for JB Hi and COG Financial
-0.76 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between JBH and COG is -0.76. Overlapping area represents the amount of risk that can be diversified away by holding JB Hi Fi and COG Financial Services in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on COG Financial Services and JB Hi 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 Hi Fi are associated (or correlated) with COG Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of COG Financial Services has no effect on the direction of JB Hi i.e., JB Hi and COG Financial go up and down completely randomly.
Pair Corralation between JB Hi and COG Financial
Assuming the 90 days trading horizon JB Hi Fi is expected to generate 0.75 times more return on investment than COG Financial. However, JB Hi Fi is 1.34 times less risky than COG Financial. It trades about 0.2 of its potential returns per unit of risk. COG Financial Services is currently generating about 0.09 per unit of risk. If you would invest 9,046 in JB Hi Fi on September 26, 2024 and sell it today you would earn a total of 554.00 from holding JB Hi Fi or generate 6.12% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Weak |
Accuracy | 100.0% |
Values | Daily Returns |
JB Hi Fi vs. COG Financial Services
Performance |
Timeline |
JB Hi Fi |
COG Financial Services |
JB Hi and COG Financial Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with JB Hi and COG Financial
The main advantage of trading using opposite JB Hi and COG Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if JB Hi position performs unexpectedly, COG 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 COG Financial will offset losses from the drop in COG Financial's long position.JB Hi vs. Sensen Networks | JB Hi vs. Ecofibre | JB Hi vs. iShares Global Healthcare | JB Hi vs. Adriatic Metals Plc |
COG Financial vs. Audio Pixels Holdings | COG Financial vs. Iodm | COG Financial vs. Nsx | COG Financial vs. TTG Fintech |
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.
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