Correlation Between JSW Holdings and AXISCADES Technologies

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

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

Diversification Opportunities for JSW Holdings and AXISCADES Technologies

-0.33

Correlation Coefficient

JSW Holdings  AXISCADES Technologies

Very good diversification

The 3 months correlation between JSW and AXISCADES is -0.33. Overlapping area represents the amount of risk that can be diversified away by holding JSW Holdings Limited and AXISCADES Technologies Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AXISCADES Technologies and JSW Holdings 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 JSW Holdings Limited are associated (or correlated) with AXISCADES Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AXISCADES Technologies has no effect on the direction of JSW Holdings i.e., JSW Holdings and AXISCADES Technologies go up and down completely randomly.

Pair Corralation between JSW Holdings and AXISCADES Technologies

Assuming the 90 days trading horizon JSW Holdings Limited is expected to generate 1.57 times more return on investment than AXISCADES Technologies. However, JSW Holdings is 1.57 times more volatile than AXISCADES Technologies Limited. It trades about 0.19 of its potential returns per unit of risk. AXISCADES Technologies Limited is currently generating about 0.02 per unit of risk. If you would invest  829,245  in JSW Holdings Limited on September 23, 2024 and sell it today you would earn a total of  612,600  from holding JSW Holdings Limited or generate 73.87% return on investment over 90 days.

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

JSW Holdings Limited  vs.  AXISCADES Technologies Limited

JSW Holdings Limited

Risk-Adjusted Performance

14 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in JSW Holdings Limited are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. In spite of very unsteady basic indicators, JSW Holdings displayed solid returns over the last few months and may actually be approaching a breakup point.

AXISCADES Technologies

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in AXISCADES Technologies Limited are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of rather sound fundamental indicators, AXISCADES Technologies is not utilizing all of its potentials. The latest stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with JSW Holdings and AXISCADES Technologies

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

The idea behind JSW Holdings Limited and AXISCADES Technologies 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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.