Correlation Between JBM Auto and Dow Jones
Can any of the company-specific risk be diversified away by investing in both JBM Auto and Dow Jones 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 JBM Auto and Dow Jones into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between JBM Auto Limited and Dow Jones Industrial, you can compare the effects of market volatilities on JBM Auto and Dow Jones 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 JBM Auto with a short position of Dow Jones. Check out your portfolio center. Please also check ongoing floating volatility patterns of JBM Auto and Dow Jones.
Diversification Opportunities for JBM Auto and Dow Jones
Pay attention - limited upside
The 3 months correlation between JBM and Dow is -0.75. Overlapping area represents the amount of risk that can be diversified away by holding JBM Auto Limited and Dow Jones Industrial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dow Jones Industrial and JBM Auto 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 JBM Auto Limited are associated (or correlated) with Dow Jones. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dow Jones Industrial has no effect on the direction of JBM Auto i.e., JBM Auto and Dow Jones go up and down completely randomly.
Pair Corralation between JBM Auto and Dow Jones
Assuming the 90 days trading horizon JBM Auto Limited is expected to generate 5.03 times more return on investment than Dow Jones. However, JBM Auto is 5.03 times more volatile than Dow Jones Industrial. It trades about 0.06 of its potential returns per unit of risk. Dow Jones Industrial is currently generating about 0.11 per unit of risk. If you would invest 92,337 in JBM Auto Limited on September 2, 2024 and sell it today you would earn a total of 62,208 from holding JBM Auto Limited or generate 67.37% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 98.39% |
| Values | Daily Returns |
JBM Auto Limited vs. Dow Jones Industrial
Performance |
| Timeline |
JBM Auto and Dow Jones Volatility Contrast
Predicted Return Density |
| Returns |
JBM Auto Limited
Pair trading matchups for JBM Auto
Dow Jones Industrial
Pair trading matchups for Dow Jones
Pair Trading with JBM Auto and Dow Jones
The main advantage of trading using opposite JBM Auto and Dow Jones positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if JBM Auto position performs unexpectedly, Dow Jones 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 Dow Jones will offset losses from the drop in Dow Jones' long position.| JBM Auto vs. Hilton Metal Forging | JBM Auto vs. Baazar Style Retail | JBM Auto vs. Osia Hyper Retail | JBM Auto vs. Shivalik Bimetal Controls |
| Dow Jones vs. Dream Finders Homes | Dow Jones vs. GEN Restaurant Group, | Dow Jones vs. National Beverage Corp | Dow Jones vs. BJs Restaurants |
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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
Other Complementary Tools
| Portfolio Comparator Compare the composition, asset allocations and performance of any two portfolios in your account | |
| Fundamental Analysis View fundamental data based on most recent published financial statements | |
| Correlation Analysis Reduce portfolio risk simply by holding instruments which are not perfectly correlated | |
| Efficient Frontier Plot and analyze your portfolio and positions against risk-return landscape of the market. | |
| Portfolio Diagnostics Use generated alerts and portfolio events aggregator to diagnose current holdings |