Correlation Between JSW Holdings and Uniinfo Telecom

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

Diversification Opportunities for JSW Holdings and Uniinfo Telecom

-0.74

Correlation Coefficient

JSW Holdings  Uniinfo Telecom

Pay attention - limited upside

The 3 months correlation between JSW and Uniinfo is -0.74. Overlapping area represents the amount of risk that can be diversified away by holding JSW Holdings Limited and Uniinfo Telecom Services in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Uniinfo Telecom Services 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 Uniinfo Telecom. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Uniinfo Telecom Services has no effect on the direction of JSW Holdings i.e., JSW Holdings and Uniinfo Telecom go up and down completely randomly.

Pair Corralation between JSW Holdings and Uniinfo Telecom

Assuming the 90 days trading horizon JSW Holdings Limited is expected to generate 2.21 times more return on investment than Uniinfo Telecom. However, JSW Holdings is 2.21 times more volatile than Uniinfo Telecom Services. It trades about 0.28 of its potential returns per unit of risk. Uniinfo Telecom Services is currently generating about -0.01 per unit of risk. If you would invest  964,850  in JSW Holdings Limited on September 2, 2024 and sell it today you would earn a total of  449,645  from holding JSW Holdings Limited or generate 46.6% return on investment over 90 days.

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

JSW Holdings Limited  vs.  Uniinfo Telecom Services

JSW Holdings Limited

Risk-Adjusted Performance

18 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in JSW Holdings Limited are ranked lower than 18 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating basic indicators, JSW Holdings displayed solid returns over the last few months and may actually be approaching a breakup point.

Uniinfo Telecom Services

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Uniinfo Telecom Services has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest unsteady performance, the Stock's basic indicators remain healthy and the recent disarray on Wall Street may also be a sign of long period gains for the firm investors.

Pair Trading with JSW Holdings and Uniinfo Telecom

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

The idea behind JSW Holdings Limited and Uniinfo Telecom 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 Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.