Correlation Between 786 Investment and JS Global

Can any of the company-specific risk be diversified away by investing in both 786 Investment and JS Global 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 786 Investment and JS Global into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between 786 Investment Limited and JS Global Banking, you can compare the effects of market volatilities on 786 Investment and JS Global 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 786 Investment with a short position of JS Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of 786 Investment and JS Global.

Diversification Opportunities for 786 Investment and JS Global

0.67

Correlation Coefficient

786 Investment  JS Global

Poor diversification

The 3 months correlation between 786 and JSGBETF is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding 786 Investment Limited and JS Global Banking in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on JS Global Banking and 786 Investment 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 786 Investment Limited are associated (or correlated) with JS Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of JS Global Banking has no effect on the direction of 786 Investment i.e., 786 Investment and JS Global go up and down completely randomly.

Pair Corralation between 786 Investment and JS Global

Assuming the 90 days trading horizon 786 Investment Limited is expected to generate 1.26 times more return on investment than JS Global. However, 786 Investment is 1.26 times more volatile than JS Global Banking. It trades about 0.23 of its potential returns per unit of risk. JS Global Banking is currently generating about 0.15 per unit of risk. If you would invest  637.00  in 786 Investment Limited on September 15, 2024 and sell it today you would earn a total of  170.00  from holding 786 Investment Limited or generate 26.69% return on investment over 90 days.

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

786 Investment Limited  vs.  JS Global Banking

786 Investment

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in 786 Investment Limited are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Even with relatively weak basic indicators, 786 Investment reported solid returns over the last few months and may actually be approaching a breakup point.

JS Global Banking

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in JS Global Banking are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. Despite nearly weak technical and fundamental indicators, JS Global reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with 786 Investment and JS Global

The main advantage of trading using opposite 786 Investment and JS Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if 786 Investment position performs unexpectedly, JS Global 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 JS Global will offset losses from the drop in JS Global's long position.

The idea behind 786 Investment Limited and JS Global Banking 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 Center module to all portfolio management and optimization tools to improve performance of your portfolios.