Correlation Between JM Financial and MAS Financial

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

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

Diversification Opportunities for JM Financial and MAS Financial

0.91

Correlation Coefficient

JM Financial  MAS Financial

Almost no diversification

The 3 months correlation between JMFINANCIL and MAS is 0.91. Overlapping area represents the amount of risk that can be diversified away by holding JM Financial Limited and MAS Financial Services in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MAS Financial Services and JM 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 JM Financial Limited are associated (or correlated) with MAS Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MAS Financial Services has no effect on the direction of JM Financial i.e., JM Financial and MAS Financial go up and down completely randomly.

Pair Corralation between JM Financial and MAS Financial

Assuming the 90 days trading horizon JM Financial Limited is expected to generate 1.21 times more return on investment than MAS Financial. However, JM Financial is 1.21 times more volatile than MAS Financial Services. It trades about 0.31 of its potential returns per unit of risk. MAS Financial Services is currently generating about 0.16 per unit of risk. If you would invest  10,506  in JM Financial Limited on April 23, 2025 and sell it today you would earn a total of  6,442  from holding JM Financial Limited or generate 61.32% return on investment over 90 days.

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

JM Financial Limited  vs.  MAS Financial Services

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 unsteady fundamental indicators, JM Financial displayed solid returns over the last few months and may actually be approaching a breakup point.

MAS Financial Services

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in MAS Financial Services are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. Despite somewhat uncertain technical and fundamental indicators, MAS Financial sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with JM Financial and MAS Financial

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

The idea behind JM Financial Limited and MAS Financial Services 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 Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.