Correlation Between JS Bank and Jubilee Life
Can any of the company-specific risk be diversified away by investing in both JS Bank and Jubilee Life 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 JS Bank and Jubilee Life into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between JS Bank and Jubilee Life Insurance, you can compare the effects of market volatilities on JS Bank and Jubilee Life 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 JS Bank with a short position of Jubilee Life. Check out your portfolio center. Please also check ongoing floating volatility patterns of JS Bank and Jubilee Life.
Diversification Opportunities for JS Bank and Jubilee Life
0.55 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between JSBL and Jubilee is 0.55. Overlapping area represents the amount of risk that can be diversified away by holding JS Bank and Jubilee Life Insurance in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jubilee Life Insurance and JS Bank 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 JS Bank are associated (or correlated) with Jubilee Life. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jubilee Life Insurance has no effect on the direction of JS Bank i.e., JS Bank and Jubilee Life go up and down completely randomly.
Pair Corralation between JS Bank and Jubilee Life
Assuming the 90 days trading horizon JS Bank is expected to generate 1.13 times more return on investment than Jubilee Life. However, JS Bank is 1.13 times more volatile than Jubilee Life Insurance. It trades about 0.08 of its potential returns per unit of risk. Jubilee Life Insurance is currently generating about 0.07 per unit of risk. If you would invest 450.00 in JS Bank on October 13, 2024 and sell it today you would earn a total of 623.00 from holding JS Bank or generate 138.44% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 98.95% |
| Values | Daily Returns |
JS Bank vs. Jubilee Life Insurance
Performance |
| Timeline |
| JS Bank |
| Jubilee Life Insurance |
JS Bank and Jubilee Life Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with JS Bank and Jubilee Life
The main advantage of trading using opposite JS Bank and Jubilee Life positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if JS Bank position performs unexpectedly, Jubilee Life 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 Jubilee Life will offset losses from the drop in Jubilee Life's long position.| JS Bank vs. MCB Investment Manag | JS Bank vs. Sardar Chemical Industries | JS Bank vs. Invest Capital Investment | JS Bank vs. Reliance Insurance Co |
| Jubilee Life vs. Masood Textile Mills | Jubilee Life vs. Fauji Foods | Jubilee Life vs. KSB Pumps | Jubilee Life vs. Mari Petroleum |
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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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