Correlation Between Jb Financial and People Technology

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

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

Diversification Opportunities for Jb Financial and People Technology

0.23

Correlation Coefficient

Jb Financial  People Technology

Modest diversification

The 3 months correlation between 175330 and People is 0.23. Overlapping area represents the amount of risk that can be diversified away by holding Jb Financial and People Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on People Technology 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 People Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of People Technology has no effect on the direction of Jb Financial i.e., Jb Financial and People Technology go up and down completely randomly.

Pair Corralation between Jb Financial and People Technology

Assuming the 90 days trading horizon Jb Financial is expected to generate 1.57 times less return on investment than People Technology. But when comparing it to its historical volatility, Jb Financial is 1.66 times less risky than People Technology. It trades about 0.1 of its potential returns per unit of risk. People Technology is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest  3,939,727  in People Technology on December 24, 2024 and sell it today you would earn a total of  640,273  from holding People Technology or generate 16.25% return on investment over 90 days.

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

Jb Financial  vs.  People Technology

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 sustained solid returns over the last few months and may actually be approaching a breakup point.

People Technology

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in People Technology are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, People Technology sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Jb Financial and People Technology

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

The idea behind Jb Financial and People Technology 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 Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.