Correlation Between Jb Financial and Finebesteel

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

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

Diversification Opportunities for Jb Financial and Finebesteel

0.59

Correlation Coefficient

Jb Financial  Finebesteel

Very weak diversification

The 3 months correlation between 175330 and Finebesteel is 0.59. Overlapping area represents the amount of risk that can be diversified away by holding Jb Financial and Finebesteel in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Finebesteel 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 Finebesteel. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Finebesteel has no effect on the direction of Jb Financial i.e., Jb Financial and Finebesteel go up and down completely randomly.

Pair Corralation between Jb Financial and Finebesteel

Assuming the 90 days trading horizon Jb Financial is expected to under-perform the Finebesteel. But the stock apears to be less risky and, when comparing its historical volatility, Jb Financial is 1.23 times less risky than Finebesteel. The stock trades about -0.05 of its potential returns per unit of risk. The Finebesteel is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest  101,200  in Finebesteel on December 1, 2024 and sell it today you would earn a total of  10,100  from holding Finebesteel or generate 9.98% 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.  Finebesteel

Jb Financial

Risk-Adjusted Performance

Very Weak

Over the last 90 days Jb Financial 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.

Finebesteel

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Finebesteel are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Finebesteel sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Jb Financial and Finebesteel

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

The idea behind Jb Financial and Finebesteel 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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.