Correlation Between Jb Financial and ED
Can any of the company-specific risk be diversified away by investing in both Jb Financial and ED 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 ED into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Jb Financial and ED Co, you can compare the effects of market volatilities on Jb Financial and ED 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 ED. Check out your portfolio center. Please also check ongoing floating volatility patterns of Jb Financial and ED.
Diversification Opportunities for Jb Financial and ED
-0.37 | Correlation Coefficient |
Very good diversification
The 3 months correlation between 175330 and ED is -0.37. Overlapping area represents the amount of risk that can be diversified away by holding Jb Financial and ED Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ED Co 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 ED. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ED Co has no effect on the direction of Jb Financial i.e., Jb Financial and ED go up and down completely randomly.
Pair Corralation between Jb Financial and ED
Assuming the 90 days trading horizon Jb Financial is expected to generate 1.25 times less return on investment than ED. But when comparing it to its historical volatility, Jb Financial is 2.72 times less risky than ED. It trades about 0.06 of its potential returns per unit of risk. ED Co is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 2,076,976 in ED Co on October 7, 2024 and sell it today you would earn a total of 118,024 from holding ED Co or generate 5.68% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Jb Financial vs. ED Co
Performance |
| Timeline |
| Jb Financial |
| ED Co |
Jb Financial and ED Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Jb Financial and ED
The main advantage of trading using opposite Jb Financial and ED positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Jb Financial position performs unexpectedly, ED 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 ED will offset losses from the drop in ED's long position.| Jb Financial vs. Hana Financial | Jb Financial vs. Woori Financial Group | Jb Financial vs. Samsung Electronics Co | Jb Financial vs. Samsung Electronics Co |
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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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