Correlation Between Crescent Steel and JS Global

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

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

Diversification Opportunities for Crescent Steel and JS Global

-0.35

Correlation Coefficient

Crescent Steel  JS Global

Very good diversification

The 3 months correlation between Crescent and JSGBETF is -0.35. Overlapping area represents the amount of risk that can be diversified away by holding Crescent Steel Allied 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 Crescent Steel 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 Crescent Steel Allied 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 Crescent Steel i.e., Crescent Steel and JS Global go up and down completely randomly.

Pair Corralation between Crescent Steel and JS Global

Assuming the 90 days trading horizon Crescent Steel Allied is expected to under-perform the JS Global. In addition to that, Crescent Steel is 1.13 times more volatile than JS Global Banking. It trades about -0.02 of its total potential returns per unit of risk. JS Global Banking is currently generating about 0.05 per unit of volatility. If you would invest  1,888  in JS Global Banking on October 25, 2024 and sell it today you would earn a total of  116.00  from holding JS Global Banking or generate 6.14% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	96.77%
Values	Daily Returns

Crescent Steel Allied  vs.  JS Global Banking

Crescent Steel Allied

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Crescent Steel Allied has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, Crescent Steel is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

JS Global Banking

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in JS Global Banking are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite nearly conflicting technical and fundamental indicators, JS Global may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Pair Trading with Crescent Steel and JS Global

The main advantage of trading using opposite Crescent Steel and JS Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Crescent Steel 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 Crescent Steel Allied 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.

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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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.