Correlation Between JB Hi and Regal Investment
Can any of the company-specific risk be diversified away by investing in both JB Hi and Regal Investment 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 Regal Investment 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 Regal Investment, you can compare the effects of market volatilities on JB Hi and Regal Investment 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 Regal Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of JB Hi and Regal Investment.
Diversification Opportunities for JB Hi and Regal Investment
0.27 | Correlation Coefficient |
Modest diversification
The 3 months correlation between JBH and Regal is 0.27. Overlapping area represents the amount of risk that can be diversified away by holding JB Hi Fi and Regal Investment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Regal Investment 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 Regal Investment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Regal Investment has no effect on the direction of JB Hi i.e., JB Hi and Regal Investment go up and down completely randomly.
Pair Corralation between JB Hi and Regal Investment
Assuming the 90 days trading horizon JB Hi Fi is expected to generate 0.93 times more return on investment than Regal Investment. However, JB Hi Fi is 1.08 times less risky than Regal Investment. It trades about 0.38 of its potential returns per unit of risk. Regal Investment is currently generating about -0.22 per unit of risk. If you would invest 8,562 in JB Hi Fi on September 12, 2024 and sell it today you would earn a total of 754.00 from holding JB Hi Fi or generate 8.81% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
JB Hi Fi vs. Regal Investment
Performance |
| Timeline |
| JB Hi Fi |
| Regal Investment |
JB Hi and Regal Investment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with JB Hi and Regal Investment
The main advantage of trading using opposite JB Hi and Regal Investment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if JB Hi position performs unexpectedly, Regal Investment 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 Regal Investment will offset losses from the drop in Regal Investment's long position.| JB Hi vs. Stelar Metals | JB Hi vs. Autosports Group | JB Hi vs. Wt Financial Group | JB Hi vs. Perpetual Credit Income |
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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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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