Correlation Between JB Chemicals and Elin Electronics

Specify exactly 2 symbols:
Can any of the company-specific risk be diversified away by investing in both JB Chemicals and Elin Electronics 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 JB Chemicals and Elin Electronics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between JB Chemicals Pharmaceuticals and Elin Electronics Limited, you can compare the effects of market volatilities on JB Chemicals and Elin Electronics 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 JB Chemicals with a short position of Elin Electronics. Check out your portfolio center. Please also check ongoing floating volatility patterns of JB Chemicals and Elin Electronics.

Diversification Opportunities for JB Chemicals and Elin Electronics

0.32
  Correlation Coefficient

Weak diversification

The 3 months correlation between JBCHEPHARM and Elin is 0.32. Overlapping area represents the amount of risk that can be diversified away by holding JB Chemicals Pharmaceuticals and Elin Electronics Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Elin Electronics and JB Chemicals 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 JB Chemicals Pharmaceuticals are associated (or correlated) with Elin Electronics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Elin Electronics has no effect on the direction of JB Chemicals i.e., JB Chemicals and Elin Electronics go up and down completely randomly.

Pair Corralation between JB Chemicals and Elin Electronics

Assuming the 90 days trading horizon JB Chemicals Pharmaceuticals is expected to generate 0.71 times more return on investment than Elin Electronics. However, JB Chemicals Pharmaceuticals is 1.41 times less risky than Elin Electronics. It trades about -0.02 of its potential returns per unit of risk. Elin Electronics Limited is currently generating about -0.06 per unit of risk. If you would invest  187,400  in JB Chemicals Pharmaceuticals on September 29, 2024 and sell it today you would lose (5,545) from holding JB Chemicals Pharmaceuticals or give up 2.96% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthVery Weak
Accuracy98.39%
ValuesDaily Returns

JB Chemicals Pharmaceuticals  vs.  Elin Electronics Limited

 Performance 
       Timeline  
JB Chemicals Pharmac 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days JB Chemicals Pharmaceuticals has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fairly strong basic indicators, JB Chemicals is not utilizing all of its potentials. The latest stock price confusion, may contribute to short-horizon losses for the traders.
Elin Electronics 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days Elin Electronics Limited has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest uncertain performance, the Stock's basic indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the firm private investors.

JB Chemicals and Elin Electronics Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with JB Chemicals and Elin Electronics

The main advantage of trading using opposite JB Chemicals and Elin Electronics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if JB Chemicals position performs unexpectedly, Elin Electronics 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 Elin Electronics will offset losses from the drop in Elin Electronics' long position.
The idea behind JB Chemicals Pharmaceuticals and Elin Electronics 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.
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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.

Other Complementary Tools

Piotroski F Score
Get Piotroski F Score based on the binary analysis strategy of nine different fundamentals
Equity Forecasting
Use basic forecasting models to generate price predictions and determine price momentum
Portfolio Rebalancing
Analyze risk-adjusted returns against different time horizons to find asset-allocation targets
Equity Valuation
Check real value of public entities based on technical and fundamental data
Pattern Recognition
Use different Pattern Recognition models to time the market across multiple global exchanges