Correlation Between PM Capital and JB Hi
Can any of the company-specific risk be diversified away by investing in both PM Capital 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 PM Capital and JB Hi into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between PM Capital Global and JB Hi Fi, you can compare the effects of market volatilities on PM Capital 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 PM Capital with a short position of JB Hi. Check out your portfolio center. Please also check ongoing floating volatility patterns of PM Capital and JB Hi.
Diversification Opportunities for PM Capital and JB Hi
0.04 | Correlation Coefficient |
Significant diversification
The 3 months correlation between PGF and JBH is 0.04. Overlapping area represents the amount of risk that can be diversified away by holding PM Capital Global 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 PM Capital 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 PM Capital Global 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 PM Capital i.e., PM Capital and JB Hi go up and down completely randomly.
Pair Corralation between PM Capital and JB Hi
Assuming the 90 days trading horizon PM Capital Global is expected to under-perform the JB Hi. But the stock apears to be less risky and, when comparing its historical volatility, PM Capital Global is 1.0 times less risky than JB Hi. The stock trades about -0.17 of its potential returns per unit of risk. The JB Hi Fi is currently generating about 0.38 of returns per unit of risk over similar time horizon. If you would invest 8,562 in JB Hi Fi on September 12, 2024 and sell it today you would earn a total of 754.00 from holding JB Hi Fi or generate 8.81% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
PM Capital Global vs. JB Hi Fi
Performance |
| Timeline |
| PM Capital Global |
| JB Hi Fi |
PM Capital and JB Hi Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PM Capital and JB Hi
The main advantage of trading using opposite PM Capital and JB Hi positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PM Capital 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.| PM Capital vs. Global Data Centre | PM Capital vs. Duxton Broadacre Farms | PM Capital vs. Gold Road Resources | PM Capital vs. ABACUS STORAGE KING |
| JB Hi vs. Stelar Metals | JB Hi vs. Autosports Group | JB Hi vs. Wt Financial Group | JB Hi vs. Perpetual Credit Income |
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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
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