Correlation Between Jb Financial and SCI Information

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

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

Diversification Opportunities for Jb Financial and SCI Information

-0.9

Correlation Coefficient

Jb Financial  SCI Information

Pay attention - limited upside

The 3 months correlation between 175330 and SCI is -0.9. Overlapping area represents the amount of risk that can be diversified away by holding Jb Financial and SCI Information Service in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SCI Information Service 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 SCI Information. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SCI Information Service has no effect on the direction of Jb Financial i.e., Jb Financial and SCI Information go up and down completely randomly.

Pair Corralation between Jb Financial and SCI Information

Assuming the 90 days trading horizon Jb Financial is expected to generate 0.95 times more return on investment than SCI Information. However, Jb Financial is 1.05 times less risky than SCI Information. It trades about 0.25 of its potential returns per unit of risk. SCI Information Service is currently generating about -0.16 per unit of risk. If you would invest  1,418,401  in Jb Financial on September 3, 2024 and sell it today you would earn a total of  549,599  from holding Jb Financial or generate 38.75% return on investment over 90 days.

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

Jb Financial  vs.  SCI Information Service

Jb Financial

Risk-Adjusted Performance

19 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Jb Financial are ranked lower than 19 (%) 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.

SCI Information Service

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days SCI Information Service 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 SCI Information

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

The idea behind Jb Financial and SCI Information Service 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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.