Correlation Between Crescent Star and JS Bank
Can any of the company-specific risk be diversified away by investing in both Crescent Star and JS Bank 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 Crescent Star and JS Bank into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Crescent Star Insurance and JS Bank, you can compare the effects of market volatilities on Crescent Star and JS Bank 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 Crescent Star with a short position of JS Bank. Check out your portfolio center. Please also check ongoing floating volatility patterns of Crescent Star and JS Bank.
Diversification Opportunities for Crescent Star and JS Bank
0.2 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Crescent and JSBL is 0.2. Overlapping area represents the amount of risk that can be diversified away by holding Crescent Star Insurance and JS Bank in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on JS Bank and Crescent Star 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 Crescent Star Insurance are associated (or correlated) with JS Bank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of JS Bank has no effect on the direction of Crescent Star i.e., Crescent Star and JS Bank go up and down completely randomly.
Pair Corralation between Crescent Star and JS Bank
Assuming the 90 days trading horizon Crescent Star is expected to generate 1.01 times less return on investment than JS Bank. In addition to that, Crescent Star is 1.47 times more volatile than JS Bank. It trades about 0.06 of its total potential returns per unit of risk. JS Bank is currently generating about 0.08 per unit of volatility. If you would invest 450.00 in JS Bank on October 28, 2024 and sell it today you would earn a total of 703.00 from holding JS Bank or generate 156.22% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 99.58% |
| Values | Daily Returns |
Crescent Star Insurance vs. JS Bank
Performance |
| Timeline |
| Crescent Star Insurance |
| JS Bank |
Crescent Star and JS Bank Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Crescent Star and JS Bank
The main advantage of trading using opposite Crescent Star and JS Bank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Crescent Star position performs unexpectedly, JS Bank 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 JS Bank will offset losses from the drop in JS Bank's long position.| Crescent Star vs. Reliance Insurance Co | Crescent Star vs. EFU General Insurance | Crescent Star vs. Shaheen Insurance | Crescent Star vs. Pakistan Reinsurance |
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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