Correlation Between JSW Holdings and Quintegra Solutions

Can any of the company-specific risk be diversified away by investing in both JSW Holdings and Quintegra Solutions 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 Quintegra Solutions 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 Quintegra Solutions Limited, you can compare the effects of market volatilities on JSW Holdings and Quintegra Solutions 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 Quintegra Solutions. Check out your portfolio center. Please also check ongoing floating volatility patterns of JSW Holdings and Quintegra Solutions.

Diversification Opportunities for JSW Holdings and Quintegra Solutions

0.8

Correlation Coefficient

JSW Holdings  Quintegra Solutions

Very poor diversification

The 3 months correlation between JSW and Quintegra is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding JSW Holdings Limited and Quintegra Solutions Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Quintegra Solutions 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 Quintegra Solutions. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Quintegra Solutions has no effect on the direction of JSW Holdings i.e., JSW Holdings and Quintegra Solutions go up and down completely randomly.

Pair Corralation between JSW Holdings and Quintegra Solutions

Assuming the 90 days trading horizon JSW Holdings Limited is expected to under-perform the Quintegra Solutions. In addition to that, JSW Holdings is 2.02 times more volatile than Quintegra Solutions Limited. It trades about -0.24 of its total potential returns per unit of risk. Quintegra Solutions Limited is currently generating about 0.31 per unit of volatility. If you would invest  181.00  in Quintegra Solutions Limited on September 13, 2024 and sell it today you would earn a total of  22.00  from holding Quintegra Solutions Limited or generate 12.15% return on investment over 90 days.

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

JSW Holdings Limited  vs.  Quintegra Solutions Limited

JSW Holdings Limited

Risk-Adjusted Performance

16 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in JSW Holdings Limited are ranked lower than 16 (%) of all global equities and portfolios over the last 90 days. In spite of very uncertain basic indicators, JSW Holdings displayed solid returns over the last few months and may actually be approaching a breakup point.

Quintegra Solutions

Risk-Adjusted Performance

19 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Quintegra Solutions Limited are ranked lower than 19 (%) of all global equities and portfolios over the last 90 days. Despite nearly unfluctuating technical and fundamental indicators, Quintegra Solutions reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with JSW Holdings and Quintegra Solutions

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

The idea behind JSW Holdings Limited and Quintegra Solutions 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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .