Correlation Between Bank Central and JSR
Can any of the company-specific risk be diversified away by investing in both Bank Central and JSR 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 Bank Central and JSR into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Bank Central Asia and JSR Corporation, you can compare the effects of market volatilities on Bank Central and JSR 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 Bank Central with a short position of JSR. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bank Central and JSR.
Diversification Opportunities for Bank Central and JSR
-0.47 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Bank and JSR is -0.47. Overlapping area represents the amount of risk that can be diversified away by holding Bank Central Asia and JSR Corp. in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on JSR Corporation and Bank Central 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 Bank Central Asia are associated (or correlated) with JSR. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of JSR Corporation has no effect on the direction of Bank Central i.e., Bank Central and JSR go up and down completely randomly.
Pair Corralation between Bank Central and JSR
Assuming the 90 days horizon Bank Central Asia is expected to generate 4.2 times more return on investment than JSR. However, Bank Central is 4.2 times more volatile than JSR Corporation. It trades about 0.04 of its potential returns per unit of risk. JSR Corporation is currently generating about 0.09 per unit of risk. If you would invest 1,390 in Bank Central Asia on September 2, 2024 and sell it today you would earn a total of 191.00 from holding Bank Central Asia or generate 13.74% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 54.84% |
| Values | Daily Returns |
Bank Central Asia vs. JSR Corp.
Performance |
| Timeline |
| Bank Central Asia |
| JSR Corporation |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Bank Central and JSR Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bank Central and JSR
The main advantage of trading using opposite Bank Central and JSR positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bank Central position performs unexpectedly, JSR 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 JSR will offset losses from the drop in JSR's long position.| Bank Central vs. Nedbank Group | Bank Central vs. Standard Bank Group | Bank Central vs. Kasikornbank Public Co | Bank Central vs. KBC Groep NV |
| JSR vs. Chemours Co | JSR vs. International Flavors Fragrances | JSR vs. Air Products and | JSR vs. PPG Industries |
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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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