Correlation Between Menif Financial and Jacob Finance

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

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

Diversification Opportunities for Menif Financial and Jacob Finance

0.87

Correlation Coefficient

Menif Financial  Jacob Finance

Very poor diversification

The 3 months correlation between Menif and Jacob is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding Menif Financial Services and Jacob Finance And in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jacob Finance And and Menif Financial 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 Menif Financial Services are associated (or correlated) with Jacob Finance. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jacob Finance And has no effect on the direction of Menif Financial i.e., Menif Financial and Jacob Finance go up and down completely randomly.

Pair Corralation between Menif Financial and Jacob Finance

Assuming the 90 days trading horizon Menif Financial Services is expected to generate 1.06 times more return on investment than Jacob Finance. However, Menif Financial is 1.06 times more volatile than Jacob Finance And. It trades about 0.23 of its potential returns per unit of risk. Jacob Finance And is currently generating about 0.15 per unit of risk. If you would invest  120,796  in Menif Financial Services on September 2, 2024 and sell it today you would earn a total of  27,204  from holding Menif Financial Services or generate 22.52% return on investment over 90 days.

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

Menif Financial Services  vs.  Jacob Finance And

Menif Financial Services

Risk-Adjusted Performance

17 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Menif Financial Services are ranked lower than 17 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Menif Financial sustained solid returns over the last few months and may actually be approaching a breakup point.

Jacob Finance And

Risk-Adjusted Performance

11 of 100

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.

Pair Trading with Menif Financial and Jacob Finance

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

The idea behind Menif Financial Services and Jacob Finance And 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.

Check out your portfolio center.

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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.