Correlation Between JS Global and Invest Capital

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

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

Diversification Opportunities for JS Global and Invest Capital

0.15

Correlation Coefficient

JS Global  Invest Capital

Average diversification

The 3 months correlation between JSGBETF and Invest is 0.15. Overlapping area represents the amount of risk that can be diversified away by holding JS Global Banking and Invest Capital Investment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Invest Capital Investment and JS 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 JS Global Banking are associated (or correlated) with Invest Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Invest Capital Investment has no effect on the direction of JS Global i.e., JS Global and Invest Capital go up and down completely randomly.

Pair Corralation between JS Global and Invest Capital

Assuming the 90 days trading horizon JS Global Banking is expected to generate 0.83 times more return on investment than Invest Capital. However, JS Global Banking is 1.21 times less risky than Invest Capital. It trades about 0.14 of its potential returns per unit of risk. Invest Capital Investment is currently generating about -0.03 per unit of risk. If you would invest  1,633  in JS Global Banking on September 16, 2024 and sell it today you would earn a total of  464.00  from holding JS Global Banking or generate 28.41% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	93.85%
Values	Daily Returns

JS Global Banking  vs.  Invest Capital Investment

JS Global Banking

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in JS Global Banking are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. Despite nearly weak technical and fundamental indicators, JS Global reported solid returns over the last few months and may actually be approaching a breakup point.

Invest Capital Investment

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Invest Capital Investment has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest weak performance, the Stock's forward indicators remain persistent and the latest mess on Wall Street may also be a sign of long-standing gains for the company institutional investors.

Pair Trading with JS Global and Invest Capital

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

The idea behind JS Global Banking and Invest Capital Investment 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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.