Correlation Between Creative Global and JBDI Holdings

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

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

Diversification Opportunities for Creative Global and JBDI Holdings

0.46

Correlation Coefficient

Creative Global  JBDI Holdings

Very weak diversification

The 3 months correlation between Creative and JBDI is 0.46. Overlapping area represents the amount of risk that can be diversified away by holding Creative Global Technology and JBDI Holdings Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on JBDI Holdings Limited and Creative Global 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 Creative Global Technology are associated (or correlated) with JBDI Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of JBDI Holdings Limited has no effect on the direction of Creative Global i.e., Creative Global and JBDI Holdings go up and down completely randomly.

Pair Corralation between Creative Global and JBDI Holdings

Given the investment horizon of 90 days Creative Global Technology is expected to generate 2.72 times more return on investment than JBDI Holdings. However, Creative Global is 2.72 times more volatile than JBDI Holdings Limited. It trades about 0.35 of its potential returns per unit of risk. JBDI Holdings Limited is currently generating about 0.06 per unit of risk. If you would invest  391.00  in Creative Global Technology on September 27, 2024 and sell it today you would earn a total of  448.00  from holding Creative Global Technology or generate 114.58% return on investment over 90 days.

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

Creative Global Technology  vs.  JBDI Holdings Limited

Creative Global Tech

Risk-Adjusted Performance

18 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Creative Global Technology are ranked lower than 18 (%) of all global equities and portfolios over the last 90 days. Despite quite abnormal basic indicators, Creative Global disclosed solid returns over the last few months and may actually be approaching a breakup point.

JBDI Holdings Limited

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days JBDI Holdings Limited has generated negative risk-adjusted returns adding no value to investors with long positions. Despite abnormal performance in the last few months, the Stock's fundamental indicators remain fairly strong which may send shares a bit higher in January 2025. The recent confusion may also be a sign of long-lasting up-swing for the firm traders.

Pair Trading with Creative Global and JBDI Holdings

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

The idea behind Creative Global Technology and JBDI Holdings Limited 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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.