Correlation Between Jb Financial and Anam Electronics

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Can any of the company-specific risk be diversified away by investing in both Jb Financial and Anam Electronics 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 Anam Electronics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Jb Financial and Anam Electronics Co, you can compare the effects of market volatilities on Jb Financial and Anam Electronics 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 Anam Electronics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Jb Financial and Anam Electronics.

Diversification Opportunities for Jb Financial and Anam Electronics

-0.33
  Correlation Coefficient

Very good diversification

The 3 months correlation between 175330 and Anam is -0.33. Overlapping area represents the amount of risk that can be diversified away by holding Jb Financial and Anam Electronics Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Anam Electronics 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 Anam Electronics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Anam Electronics has no effect on the direction of Jb Financial i.e., Jb Financial and Anam Electronics go up and down completely randomly.

Pair Corralation between Jb Financial and Anam Electronics

Assuming the 90 days trading horizon Jb Financial is expected to generate 0.96 times more return on investment than Anam Electronics. However, Jb Financial is 1.04 times less risky than Anam Electronics. It trades about 0.26 of its potential returns per unit of risk. Anam Electronics Co is currently generating about -0.05 per unit of risk. If you would invest  1,424,360  in Jb Financial on August 31, 2024 and sell it today you would earn a total of  569,640  from holding Jb Financial or generate 39.99% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthInsignificant
Accuracy100.0%
ValuesDaily Returns

Jb Financial  vs.  Anam Electronics Co

 Performance 
       Timeline  
Jb Financial 

Risk-Adjusted Performance

20 of 100

 
Weak
 
Strong
Solid
Compared to the overall equity markets, risk-adjusted returns on investments in Jb Financial are ranked lower than 20 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Jb Financial sustained solid returns over the last few months and may actually be approaching a breakup point.
Anam Electronics 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days Anam Electronics Co has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest weak performance, the Stock's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

Jb Financial and Anam Electronics Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Jb Financial and Anam Electronics

The main advantage of trading using opposite Jb Financial and Anam Electronics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Jb Financial position performs unexpectedly, Anam Electronics 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 Anam Electronics will offset losses from the drop in Anam Electronics' long position.
The idea behind Jb Financial and Anam Electronics 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.
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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.

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