Correlation Between JB Hi and Bendigo

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

By analyzing existing cross correlation between JB Hi Fi and Bendigo And Adelaide, you can compare the effects of market volatilities on JB Hi and Bendigo 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 Hi with a short position of Bendigo. Check out your portfolio center. Please also check ongoing floating volatility patterns of JB Hi and Bendigo.

Diversification Opportunities for JB Hi and Bendigo

0.24

Correlation Coefficient

JB Hi  Bendigo

Modest diversification

The 3 months correlation between JBH and Bendigo is 0.24. Overlapping area represents the amount of risk that can be diversified away by holding JB Hi Fi and Bendigo And Adelaide in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bendigo And Adelaide and JB Hi 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 Hi Fi are associated (or correlated) with Bendigo. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bendigo And Adelaide has no effect on the direction of JB Hi i.e., JB Hi and Bendigo go up and down completely randomly.

Pair Corralation between JB Hi and Bendigo

Assuming the 90 days trading horizon JB Hi Fi is expected to generate 1.11 times more return on investment than Bendigo. However, JB Hi is 1.11 times more volatile than Bendigo And Adelaide. It trades about 0.12 of its potential returns per unit of risk. Bendigo And Adelaide is currently generating about 0.05 per unit of risk. If you would invest  3,969  in JB Hi Fi on December 2, 2024 and sell it today you would earn a total of  5,236  from holding JB Hi Fi or generate 131.92% return on investment over 90 days.

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

JB Hi Fi  vs.  Bendigo And Adelaide

JB Hi Fi

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in JB Hi Fi are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable technical indicators, JB Hi is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

Bendigo And Adelaide

Risk-Adjusted Performance

Very Weak

Over the last 90 days Bendigo And Adelaide has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of uncertain performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in April 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Pair Trading with JB Hi and Bendigo

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

The idea behind JB Hi Fi and Bendigo And Adelaide 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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.