Correlation Between Jb Financial and Aurora World
Can any of the company-specific risk be diversified away by investing in both Jb Financial and Aurora World 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 Aurora World into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Jb Financial and Aurora World, you can compare the effects of market volatilities on Jb Financial and Aurora World 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 Aurora World. Check out your portfolio center. Please also check ongoing floating volatility patterns of Jb Financial and Aurora World.
Diversification Opportunities for Jb Financial and Aurora World
0.77 | Correlation Coefficient |
Poor diversification
The 3 months correlation between 175330 and Aurora is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding Jb Financial and Aurora World in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aurora World 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 Aurora World. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aurora World has no effect on the direction of Jb Financial i.e., Jb Financial and Aurora World go up and down completely randomly.
Pair Corralation between Jb Financial and Aurora World
Assuming the 90 days trading horizon Jb Financial is expected to generate 1.54 times more return on investment than Aurora World. However, Jb Financial is 1.54 times more volatile than Aurora World. It trades about 0.12 of its potential returns per unit of risk. Aurora World is currently generating about -0.03 per unit of risk. If you would invest 793,923 in Jb Financial on September 12, 2024 and sell it today you would earn a total of 995,077 from holding Jb Financial or generate 125.34% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 99.71% |
| Values | Daily Returns |
Jb Financial vs. Aurora World
Performance |
| Timeline |
| Jb Financial |
| Aurora World |
Jb Financial and Aurora World Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Jb Financial and Aurora World
The main advantage of trading using opposite Jb Financial and Aurora World positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Jb Financial position performs unexpectedly, Aurora World 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 Aurora World will offset losses from the drop in Aurora World's long position.| Jb Financial vs. Hansol Chemical Co | Jb Financial vs. Tae Kyung Chemical | Jb Financial vs. Genie Music | Jb Financial vs. Kukdo Chemical Co |
| Aurora World vs. Ssangyong Information Communication | Aurora World vs. PJ Metal Co | Aurora World vs. CG Hi Tech | Aurora World vs. Korea Computer |
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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
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