Correlation Between Shaheen Insurance and JS Global

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

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

Diversification Opportunities for Shaheen Insurance and JS Global

-0.02

Correlation Coefficient

Shaheen Insurance  JS Global

Good diversification

The 3 months correlation between Shaheen and JSGBETF is -0.02. Overlapping area represents the amount of risk that can be diversified away by holding Shaheen Insurance and JS Global Banking in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on JS Global Banking and Shaheen Insurance 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 Shaheen Insurance are associated (or correlated) with JS Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of JS Global Banking has no effect on the direction of Shaheen Insurance i.e., Shaheen Insurance and JS Global go up and down completely randomly.

Pair Corralation between Shaheen Insurance and JS Global

Assuming the 90 days trading horizon Shaheen Insurance is expected to generate 1.05 times more return on investment than JS Global. However, Shaheen Insurance is 1.05 times more volatile than JS Global Banking. It trades about 0.03 of its potential returns per unit of risk. JS Global Banking is currently generating about -0.01 per unit of risk. If you would invest  633.00  in Shaheen Insurance on December 26, 2024 and sell it today you would earn a total of  20.00  from holding Shaheen Insurance or generate 3.16% return on investment over 90 days.

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

Shaheen Insurance  vs.  JS Global Banking

Shaheen Insurance

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Shaheen Insurance are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong basic indicators, Shaheen Insurance is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

JS Global Banking

Risk-Adjusted Performance

Very Weak

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

Pair Trading with Shaheen Insurance and JS Global

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

The idea behind Shaheen Insurance and JS Global Banking 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 Stocks Directory module to find actively traded stocks across global markets.