Correlation Between Clean Science and JM Financial

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

By analyzing existing cross correlation between Clean Science and and JM Financial Limited, you can compare the effects of market volatilities on Clean Science and JM Financial 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 Clean Science with a short position of JM Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Clean Science and JM Financial.

Diversification Opportunities for Clean Science and JM Financial

0.75

Correlation Coefficient

Clean Science  JM Financial

Poor diversification

The 3 months correlation between Clean and JMFINANCIL is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding Clean Science and and JM Financial Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on JM Financial Limited and Clean Science 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 Clean Science and are associated (or correlated) with JM Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of JM Financial Limited has no effect on the direction of Clean Science i.e., Clean Science and JM Financial go up and down completely randomly.

Pair Corralation between Clean Science and JM Financial

Assuming the 90 days trading horizon Clean Science is expected to generate 9.85 times less return on investment than JM Financial. But when comparing it to its historical volatility, Clean Science and is 1.57 times less risky than JM Financial. It trades about 0.01 of its potential returns per unit of risk. JM Financial Limited is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest  7,874  in JM Financial Limited on April 24, 2025 and sell it today you would earn a total of  9,150  from holding JM Financial Limited or generate 116.21% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	99.79%
Values	Daily Returns

Clean Science and  vs.  JM Financial Limited

Clean Science

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Clean Science and are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of very weak technical and fundamental indicators, Clean Science may actually be approaching a critical reversion point that can send shares even higher in August 2025.

JM Financial Limited

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in JM Financial Limited are ranked lower than 24 (%) of all global equities and portfolios over the last 90 days. In spite of very uncertain fundamental indicators, JM Financial displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Clean Science and JM Financial

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

The idea behind Clean Science and and JM Financial Limited 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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..