Correlation Between Jb Financial and GS Retail

Can any of the company-specific risk be diversified away by investing in both Jb Financial and GS Retail 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 Jb Financial and GS Retail into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Jb Financial and GS Retail Co, you can compare the effects of market volatilities on Jb Financial and GS Retail 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 Jb Financial with a short position of GS Retail. Check out your portfolio center. Please also check ongoing floating volatility patterns of Jb Financial and GS Retail.

Diversification Opportunities for Jb Financial and GS Retail

0.03

Correlation Coefficient

Jb Financial  GS Retail

Significant diversification

The 3 months correlation between 175330 and 007070 is 0.03. Overlapping area represents the amount of risk that can be diversified away by holding Jb Financial and GS Retail Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GS Retail and Jb 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 Jb Financial are associated (or correlated) with GS Retail. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GS Retail has no effect on the direction of Jb Financial i.e., Jb Financial and GS Retail go up and down completely randomly.

Pair Corralation between Jb Financial and GS Retail

Assuming the 90 days trading horizon Jb Financial is expected to generate 1.11 times more return on investment than GS Retail. However, Jb Financial is 1.11 times more volatile than GS Retail Co. It trades about 0.06 of its potential returns per unit of risk. GS Retail Co is currently generating about -0.04 per unit of risk. If you would invest  985,269  in Jb Financial on October 11, 2024 and sell it today you would earn a total of  640,731  from holding Jb Financial or generate 65.03% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	96.46%
Values	Daily Returns

Jb Financial  vs.  GS Retail Co

Jb Financial

Risk-Adjusted Performance

0 of 100

Insignificant

Over the last 90 days Jb Financial has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, Jb Financial is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

GS Retail

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days GS Retail Co has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's basic indicators remain somewhat strong which may send shares a bit higher in February 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Pair Trading with Jb Financial and GS Retail

The main advantage of trading using opposite Jb Financial and GS Retail positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Jb Financial position performs unexpectedly, GS Retail 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 GS Retail will offset losses from the drop in GS Retail's long position.

The idea behind Jb Financial and GS Retail Co pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.