Correlation Between Hisar Metal and Jaypee Infratech

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

By analyzing existing cross correlation between Hisar Metal Industries and Jaypee Infratech Limited, you can compare the effects of market volatilities on Hisar Metal and Jaypee Infratech 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 Hisar Metal with a short position of Jaypee Infratech. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hisar Metal and Jaypee Infratech.

Diversification Opportunities for Hisar Metal and Jaypee Infratech

0.0

Correlation Coefficient

Hisar Metal  Jaypee Infratech

Pay attention - limited upside

The 3 months correlation between Hisar and Jaypee is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Hisar Metal Industries and Jaypee Infratech Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jaypee Infratech and Hisar Metal 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 Hisar Metal Industries are associated (or correlated) with Jaypee Infratech. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jaypee Infratech has no effect on the direction of Hisar Metal i.e., Hisar Metal and Jaypee Infratech go up and down completely randomly.

Pair Corralation between Hisar Metal and Jaypee Infratech

If you would invest  16,692  in Hisar Metal Industries on September 28, 2024 and sell it today you would earn a total of  5,014  from holding Hisar Metal Industries or generate 30.04% return on investment over 90 days.

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

Hisar Metal Industries  vs.  Jaypee Infratech Limited

Hisar Metal Industries

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Hisar Metal Industries are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of rather uncertain basic indicators, Hisar Metal may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Jaypee Infratech

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Jaypee Infratech Limited has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, Jaypee Infratech is not utilizing all of its potentials. The recent stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Hisar Metal and Jaypee Infratech

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

The idea behind Hisar Metal Industries and Jaypee Infratech 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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.