Correlation Between JS Investments and Soneri Bank
Can any of the company-specific risk be diversified away by investing in both JS Investments and Soneri Bank 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 Investments and Soneri Bank into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between JS Investments and Soneri Bank, you can compare the effects of market volatilities on JS Investments and Soneri Bank 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 Investments with a short position of Soneri Bank. Check out your portfolio center. Please also check ongoing floating volatility patterns of JS Investments and Soneri Bank.
Diversification Opportunities for JS Investments and Soneri Bank
0.69 | Correlation Coefficient |
Poor diversification
The 3 months correlation between JSIL and Soneri is 0.69. Overlapping area represents the amount of risk that can be diversified away by holding JS Investments and Soneri Bank in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Soneri Bank and JS Investments 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 Investments are associated (or correlated) with Soneri Bank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Soneri Bank has no effect on the direction of JS Investments i.e., JS Investments and Soneri Bank go up and down completely randomly.
Pair Corralation between JS Investments and Soneri Bank
Assuming the 90 days trading horizon JS Investments is expected to generate 1.63 times less return on investment than Soneri Bank. In addition to that, JS Investments is 1.19 times more volatile than Soneri Bank. It trades about 0.16 of its total potential returns per unit of risk. Soneri Bank is currently generating about 0.3 per unit of volatility. If you would invest 1,450 in Soneri Bank on September 14, 2024 and sell it today you would earn a total of 302.00 from holding Soneri Bank or generate 20.83% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
JS Investments vs. Soneri Bank
Performance |
| Timeline |
| JS Investments |
| Soneri Bank |
JS Investments and Soneri Bank Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with JS Investments and Soneri Bank
The main advantage of trading using opposite JS Investments and Soneri Bank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if JS Investments position performs unexpectedly, Soneri Bank 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 Soneri Bank will offset losses from the drop in Soneri Bank's long position.| JS Investments vs. Masood Textile Mills | JS Investments vs. Fauji Foods | JS Investments vs. KSB Pumps | JS Investments vs. Mari Petroleum |
| Soneri Bank vs. Crescent Steel Allied | Soneri Bank vs. Dost Steels | Soneri Bank vs. Pakistan Aluminium Beverage | Soneri Bank vs. Matco Foods |
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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
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