Correlation Between JB Hi and Stelar Metals
Can any of the company-specific risk be diversified away by investing in both JB Hi and Stelar Metals 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 Stelar Metals 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 Stelar Metals, you can compare the effects of market volatilities on JB Hi and Stelar Metals 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 Stelar Metals. Check out your portfolio center. Please also check ongoing floating volatility patterns of JB Hi and Stelar Metals.
Diversification Opportunities for JB Hi and Stelar Metals
-0.76 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between JBH and Stelar is -0.76. Overlapping area represents the amount of risk that can be diversified away by holding JB Hi Fi and Stelar Metals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Stelar Metals 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 Stelar Metals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Stelar Metals has no effect on the direction of JB Hi i.e., JB Hi and Stelar Metals go up and down completely randomly.
Pair Corralation between JB Hi and Stelar Metals
Assuming the 90 days trading horizon JB Hi Fi is expected to generate 0.27 times more return on investment than Stelar Metals. However, JB Hi Fi is 3.68 times less risky than Stelar Metals. It trades about 0.13 of its potential returns per unit of risk. Stelar Metals is currently generating about 0.0 per unit of risk. 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 |
JB Hi Fi vs. Stelar Metals
Performance |
| Timeline |
| JB Hi Fi |
| Stelar Metals |
JB Hi and Stelar Metals Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with JB Hi and Stelar Metals
The main advantage of trading using opposite JB Hi and Stelar Metals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if JB Hi position performs unexpectedly, Stelar Metals 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 Stelar Metals will offset losses from the drop in Stelar Metals' long position.| JB Hi vs. Stelar Metals | JB Hi vs. Autosports Group | JB Hi vs. Wt Financial Group | JB Hi vs. Perpetual Credit Income |
| Stelar Metals vs. Perseus Mining | Stelar Metals vs. Bailador Technology Invest | Stelar Metals vs. Black Rock Mining | Stelar Metals vs. Aristocrat Leisure |
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 Portfolio Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
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