Correlation Between Jb Financial and Q Capital

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

By analyzing existing cross correlation between Jb Financial and Q Capital Partners, you can compare the effects of market volatilities on Jb Financial and Q Capital 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 Q Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of Jb Financial and Q Capital.

Diversification Opportunities for Jb Financial and Q Capital

-0.76

Correlation Coefficient

Jb Financial  Q Capital

Pay attention - limited upside

The 3 months correlation between 175330 and 016600 is -0.76. Overlapping area represents the amount of risk that can be diversified away by holding Jb Financial and Q Capital Partners in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Q Capital Partners 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 Q Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Q Capital Partners has no effect on the direction of Jb Financial i.e., Jb Financial and Q Capital go up and down completely randomly.

Pair Corralation between Jb Financial and Q Capital

Assuming the 90 days trading horizon Jb Financial is expected to generate 1.42 times more return on investment than Q Capital. However, Jb Financial is 1.42 times more volatile than Q Capital Partners. It trades about 0.15 of its potential returns per unit of risk. Q Capital Partners is currently generating about -0.23 per unit of risk. If you would invest  1,456,145  in Jb Financial on September 12, 2024 and sell it today you would earn a total of  332,855  from holding Jb Financial or generate 22.86% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	100.0%
Values	Daily Returns

Jb Financial  vs.  Q Capital Partners

Jb Financial

Risk-Adjusted Performance

12 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Jb Financial are ranked lower than 12 (%) 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.

Q Capital Partners

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Q Capital Partners 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 January 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Pair Trading with Jb Financial and Q Capital

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

The idea behind Jb Financial and Q Capital Partners 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 Equity Valuation module to check real value of public entities based on technical and fundamental data.