Correlation Between Jb Financial and Sempio Foods

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

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

Diversification Opportunities for Jb Financial and Sempio Foods

-0.35

Correlation Coefficient

Jb Financial  Sempio Foods

Very good diversification

The 3 months correlation between 175330 and Sempio is -0.35. Overlapping area represents the amount of risk that can be diversified away by holding Jb Financial and Sempio Foods Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sempio Foods 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 Sempio Foods. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sempio Foods has no effect on the direction of Jb Financial i.e., Jb Financial and Sempio Foods go up and down completely randomly.

Pair Corralation between Jb Financial and Sempio Foods

Assuming the 90 days trading horizon Jb Financial is expected to generate 0.97 times more return on investment than Sempio Foods. However, Jb Financial is 1.03 times less risky than Sempio Foods. It trades about 0.06 of its potential returns per unit of risk. Sempio Foods Co is currently generating about -0.11 per unit of risk. If you would invest  1,454,159  in Jb Financial on September 26, 2024 and sell it today you would earn a total of  213,841  from holding Jb Financial or generate 14.71% return on investment over 90 days.

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

Jb Financial  vs.  Sempio Foods Co

Jb Financial

Risk-Adjusted Performance

5 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Jb Financial are ranked lower than 5 (%) 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 January 2025.

Sempio Foods

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Sempio Foods Co 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.

Pair Trading with Jb Financial and Sempio Foods

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

The idea behind Jb Financial and Sempio Foods 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.