Correlation Between Jardine Matheson and SBA Communications

Can any of the company-specific risk be diversified away by investing in both Jardine Matheson and SBA Communications 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 Jardine Matheson and SBA Communications into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Jardine Matheson Holdings and SBA Communications Corp, you can compare the effects of market volatilities on Jardine Matheson and SBA Communications 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 Jardine Matheson with a short position of SBA Communications. Check out your portfolio center. Please also check ongoing floating volatility patterns of Jardine Matheson and SBA Communications.

Diversification Opportunities for Jardine Matheson and SBA Communications

0.0

Correlation Coefficient

Jardine Matheson  SBA Communications

Pay attention - limited upside

The 3 months correlation between Jardine and SBA is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Jardine Matheson Holdings and SBA Communications Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SBA Communications Corp and Jardine Matheson 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 Jardine Matheson Holdings are associated (or correlated) with SBA Communications. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SBA Communications Corp has no effect on the direction of Jardine Matheson i.e., Jardine Matheson and SBA Communications go up and down completely randomly.

Pair Corralation between Jardine Matheson and SBA Communications

If you would invest (100.00) in Jardine Matheson Holdings on October 8, 2024 and sell it today you would earn a total of  100.00  from holding Jardine Matheson Holdings or generate -100.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

Jardine Matheson Holdings  vs.  SBA Communications Corp

Jardine Matheson Holdings

Risk-Adjusted Performance

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OK

Over the last 90 days Jardine Matheson Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, Jardine Matheson is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

SBA Communications Corp

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days SBA Communications Corp has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest fragile performance, the Stock's basic indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.

Pair Trading with Jardine Matheson and SBA Communications

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

The idea behind Jardine Matheson Holdings and SBA Communications Corp 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 Portfolio Dashboard module to portfolio dashboard that provides centralized access to all your investments.