Correlation Between Jb Financial and Miwon Chemicals

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

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

Diversification Opportunities for Jb Financial and Miwon Chemicals

-0.57

Correlation Coefficient

Jb Financial  Miwon Chemicals

Excellent diversification

The 3 months correlation between 175330 and Miwon is -0.57. Overlapping area represents the amount of risk that can be diversified away by holding Jb Financial and Miwon Chemicals Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Miwon Chemicals 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 Miwon Chemicals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Miwon Chemicals has no effect on the direction of Jb Financial i.e., Jb Financial and Miwon Chemicals go up and down completely randomly.

Pair Corralation between Jb Financial and Miwon Chemicals

Assuming the 90 days trading horizon Jb Financial is expected to generate 2.18 times more return on investment than Miwon Chemicals. However, Jb Financial is 2.18 times more volatile than Miwon Chemicals Co. It trades about 0.06 of its potential returns per unit of risk. Miwon Chemicals Co is currently generating about 0.01 per unit of risk. If you would invest  1,715,000  in Jb Financial on October 23, 2024 and sell it today you would earn a total of  108,000  from holding Jb Financial or generate 6.3% return on investment over 90 days.

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

Jb Financial  vs.  Miwon Chemicals Co

Jb Financial

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Jb Financial are ranked lower than 4 (%) 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 February 2025.

Miwon Chemicals

Risk-Adjusted Performance

0 of 100

Weak

Over the last 90 days Miwon Chemicals Co has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, Miwon Chemicals 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 Miwon Chemicals

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

The idea behind Jb Financial and Miwon Chemicals 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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.