Correlation Between MA Financial and JB Hi
Can any of the company-specific risk be diversified away by investing in both MA Financial and JB Hi 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 MA Financial and JB Hi into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between MA Financial Group and JB Hi Fi, you can compare the effects of market volatilities on MA Financial and JB Hi 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 MA Financial with a short position of JB Hi. Check out your portfolio center. Please also check ongoing floating volatility patterns of MA Financial and JB Hi.
Diversification Opportunities for MA Financial and JB Hi
-0.32 | Correlation Coefficient |
Very good diversification
The 3 months correlation between MAF and JBH is -0.32. Overlapping area represents the amount of risk that can be diversified away by holding MA Financial Group and JB Hi Fi in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on JB Hi Fi and MA Financial 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 MA Financial Group are associated (or correlated) with JB Hi. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of JB Hi Fi has no effect on the direction of MA Financial i.e., MA Financial and JB Hi go up and down completely randomly.
Pair Corralation between MA Financial and JB Hi
Assuming the 90 days trading horizon MA Financial Group is expected to generate 1.4 times more return on investment than JB Hi. However, MA Financial is 1.4 times more volatile than JB Hi Fi. It trades about 0.24 of its potential returns per unit of risk. JB Hi Fi is currently generating about 0.21 per unit of risk. If you would invest 591.00 in MA Financial Group on November 6, 2024 and sell it today you would earn a total of 60.00 from holding MA Financial Group or generate 10.15% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
MA Financial Group vs. JB Hi Fi
Performance |
| Timeline |
| MA Financial Group |
| JB Hi Fi |
MA Financial and JB Hi Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with MA Financial and JB Hi
The main advantage of trading using opposite MA Financial and JB Hi positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MA Financial position performs unexpectedly, JB Hi 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 JB Hi will offset losses from the drop in JB Hi's long position.| MA Financial vs. Queste Communications | MA Financial vs. Home Consortium | MA Financial vs. Torque Metals | MA Financial vs. Falcon Metals |
| JB Hi vs. Treasury Wine Estates | JB Hi vs. Infomedia | JB Hi vs. Mayfield Childcare | JB Hi vs. Cleanaway Waste Management |
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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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