Correlation Between Autosports and JB Hi
Can any of the company-specific risk be diversified away by investing in both Autosports and JB Hi 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 Autosports and JB Hi into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Autosports Group and JB Hi Fi, you can compare the effects of market volatilities on Autosports and JB Hi 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 Autosports with a short position of JB Hi. Check out your portfolio center. Please also check ongoing floating volatility patterns of Autosports and JB Hi.
Diversification Opportunities for Autosports and JB Hi
-0.67 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Autosports and JBH is -0.67. Overlapping area represents the amount of risk that can be diversified away by holding Autosports Group and JB Hi Fi in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on JB Hi Fi and Autosports 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 Autosports Group are associated (or correlated) with JB Hi. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of JB Hi Fi has no effect on the direction of Autosports i.e., Autosports and JB Hi go up and down completely randomly.
Pair Corralation between Autosports and JB Hi
Assuming the 90 days trading horizon Autosports is expected to generate 6.08 times less return on investment than JB Hi. In addition to that, Autosports is 1.26 times more volatile than JB Hi Fi. It trades about 0.02 of its total potential returns per unit of risk. JB Hi Fi is currently generating about 0.13 per unit of volatility. If you would invest 3,834 in JB Hi Fi on September 12, 2024 and sell it today you would earn a total of 5,490 from holding JB Hi Fi or generate 143.19% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Autosports Group vs. JB Hi Fi
Performance |
| Timeline |
| Autosports Group |
| JB Hi Fi |
Autosports and JB Hi Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Autosports and JB Hi
The main advantage of trading using opposite Autosports and JB Hi positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Autosports position performs unexpectedly, JB Hi 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 JB Hi will offset losses from the drop in JB Hi's long position.| Autosports vs. Toys R Us | Autosports vs. Metro Mining | Autosports vs. Carlton Investments | Autosports vs. Argo Investments |
| JB Hi vs. Stelar Metals | JB Hi vs. Autosports Group | JB Hi vs. Wt Financial Group | JB Hi vs. Perpetual Credit Income |
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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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