Correlation Between Jacob Finance and B Communications

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

By analyzing existing cross correlation between Jacob Finance And and B Communications, you can compare the effects of market volatilities on Jacob Finance and B 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 Jacob Finance with a short position of B Communications. Check out your portfolio center. Please also check ongoing floating volatility patterns of Jacob Finance and B Communications.

Diversification Opportunities for Jacob Finance and B Communications

0.7

Correlation Coefficient

Jacob Finance  B Communications

Poor diversification

The 3 months correlation between Jacob and BCOM is 0.7. Overlapping area represents the amount of risk that can be diversified away by holding Jacob Finance And and B Communications in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on B Communications and Jacob Finance 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 Jacob Finance And are associated (or correlated) with B Communications. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of B Communications has no effect on the direction of Jacob Finance i.e., Jacob Finance and B Communications go up and down completely randomly.

Pair Corralation between Jacob Finance and B Communications

Assuming the 90 days trading horizon Jacob Finance And is expected to generate 1.07 times more return on investment than B Communications. However, Jacob Finance is 1.07 times more volatile than B Communications. It trades about 0.15 of its potential returns per unit of risk. B Communications is currently generating about 0.11 per unit of risk. If you would invest  208,600  in Jacob Finance And on December 29, 2024 and sell it today you would earn a total of  46,300  from holding Jacob Finance And or generate 22.2% return on investment over 90 days.

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

Jacob Finance And  vs.  B Communications

Jacob Finance And

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Jacob Finance And are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Jacob Finance sustained solid returns over the last few months and may actually be approaching a breakup point.

B Communications

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in B Communications are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, B Communications sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Jacob Finance and B Communications

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

The idea behind Jacob Finance And and B Communications 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 Anywhere module to track or share privately all of your investments from the convenience of any device.