Correlation Between JB Hi and Inventis
Can any of the company-specific risk be diversified away by investing in both JB Hi and Inventis 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 Inventis 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 Inventis, you can compare the effects of market volatilities on JB Hi and Inventis 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 Inventis. Check out your portfolio center. Please also check ongoing floating volatility patterns of JB Hi and Inventis.
Diversification Opportunities for JB Hi and Inventis
Excellent diversification
The 3 months correlation between JBH and Inventis is -0.51. Overlapping area represents the amount of risk that can be diversified away by holding JB Hi Fi and Inventis in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Inventis 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 Inventis. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Inventis has no effect on the direction of JB Hi i.e., JB Hi and Inventis go up and down completely randomly.
Pair Corralation between JB Hi and Inventis
Assuming the 90 days trading horizon JB Hi Fi is expected to generate 0.74 times more return on investment than Inventis. However, JB Hi Fi is 1.35 times less risky than Inventis. It trades about 0.35 of its potential returns per unit of risk. Inventis is currently generating about 0.01 per unit of risk. If you would invest 7,960 in JB Hi Fi on August 28, 2024 and sell it today you would earn a total of 1,086 from holding JB Hi Fi or generate 13.64% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
JB Hi Fi vs. Inventis
Performance |
| Timeline |
| JB Hi Fi |
| Inventis |
JB Hi and Inventis Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with JB Hi and Inventis
The main advantage of trading using opposite JB Hi and Inventis positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if JB Hi position performs unexpectedly, Inventis 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 Inventis will offset losses from the drop in Inventis' long position.| JB Hi vs. Audio Pixels Holdings | JB Hi vs. Norwest Minerals | JB Hi vs. Lindian Resources | JB Hi vs. Resource Base |
| Inventis vs. Alternative Investment Trust | Inventis vs. REGAL ASIAN INVESTMENTS | Inventis vs. Platinum Asset Management | Inventis vs. MFF Capital Investments |
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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
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