Correlation Between JB Hi and First Graphene
Can any of the company-specific risk be diversified away by investing in both JB Hi and First Graphene 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 First Graphene 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 First Graphene, you can compare the effects of market volatilities on JB Hi and First Graphene 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 First Graphene. Check out your portfolio center. Please also check ongoing floating volatility patterns of JB Hi and First Graphene.
Diversification Opportunities for JB Hi and First Graphene
-0.86 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between JBH and First is -0.86. Overlapping area represents the amount of risk that can be diversified away by holding JB Hi Fi and First Graphene in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on First Graphene 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 First Graphene. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of First Graphene has no effect on the direction of JB Hi i.e., JB Hi and First Graphene go up and down completely randomly.
Pair Corralation between JB Hi and First Graphene
Assuming the 90 days trading horizon JB Hi Fi is expected to generate 0.35 times more return on investment than First Graphene. However, JB Hi Fi is 2.84 times less risky than First Graphene. It trades about 0.17 of its potential returns per unit of risk. First Graphene is currently generating about -0.05 per unit of risk. If you would invest 4,765 in JB Hi Fi on September 5, 2024 and sell it today you would earn a total of 4,515 from holding JB Hi Fi or generate 94.75% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
JB Hi Fi vs. First Graphene
Performance |
| Timeline |
| JB Hi Fi |
| First Graphene |
JB Hi and First Graphene Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with JB Hi and First Graphene
The main advantage of trading using opposite JB Hi and First Graphene positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if JB Hi position performs unexpectedly, First Graphene 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 First Graphene will offset losses from the drop in First Graphene's long position.| JB Hi vs. Inventis | JB Hi vs. Pengana Private Equity | JB Hi vs. PM Capital Global | JB Hi vs. Macquarie Group Ltd |
| First Graphene vs. Autosports Group | First Graphene vs. Falcon Metals | First Graphene vs. Homeco Daily Needs | First Graphene vs. Carawine Resources Limited |
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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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