Correlation Between Jb Financial and Kbi Metal

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

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

Diversification Opportunities for Jb Financial and Kbi Metal

0.43

Correlation Coefficient

Jb Financial  Kbi Metal

Very weak diversification

The 3 months correlation between 175330 and Kbi is 0.43. Overlapping area represents the amount of risk that can be diversified away by holding Jb Financial and Kbi Metal Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kbi Metal 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 Kbi Metal. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kbi Metal has no effect on the direction of Jb Financial i.e., Jb Financial and Kbi Metal go up and down completely randomly.

Pair Corralation between Jb Financial and Kbi Metal

Assuming the 90 days trading horizon Jb Financial is expected to generate 0.58 times more return on investment than Kbi Metal. However, Jb Financial is 1.71 times less risky than Kbi Metal. It trades about 0.1 of its potential returns per unit of risk. Kbi Metal Co is currently generating about 0.02 per unit of risk. If you would invest  1,567,835  in Jb Financial on December 30, 2024 and sell it today you would earn a total of  176,165  from holding Jb Financial or generate 11.24% return on investment over 90 days.

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

Jb Financial  vs.  Kbi Metal Co

Jb Financial

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Jb Financial are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Jb Financial may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Kbi Metal

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Kbi Metal Co are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong basic indicators, Kbi Metal is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Jb Financial and Kbi Metal

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

The idea behind Jb Financial and Kbi Metal 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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.