Correlation Between JTL Industries and Silgo Retail

Can any of the company-specific risk be diversified away by investing in both JTL Industries and Silgo Retail 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 JTL Industries and Silgo Retail into the same portfolio, which is an essential part of the fundamental portfolio management process.

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

Diversification Opportunities for JTL Industries and Silgo Retail

0.74

Correlation Coefficient

JTL Industries  Silgo Retail

Poor diversification

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

Pair Corralation between JTL Industries and Silgo Retail

Assuming the 90 days trading horizon JTL Industries is expected to under-perform the Silgo Retail. But the stock apears to be less risky and, when comparing its historical volatility, JTL Industries is 1.61 times less risky than Silgo Retail. The stock trades about -0.01 of its potential returns per unit of risk. The Silgo Retail Limited is currently generating about 0.0 of returns per unit of risk over similar time horizon. If you would invest  3,799  in Silgo Retail Limited on September 27, 2024 and sell it today you would lose (34.00) from holding Silgo Retail Limited or give up 0.89% of portfolio value over 90 days.

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

JTL Industries  vs.  Silgo Retail Limited

JTL Industries

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days JTL Industries has generated negative risk-adjusted returns adding no value to investors with long positions. Despite unfluctuating performance in the last few months, the Stock's forward indicators remain somewhat strong which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Silgo Retail Limited

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Silgo Retail Limited has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest unfluctuating performance, the Stock's essential 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 JTL Industries and Silgo Retail

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

The idea behind JTL Industries and Silgo Retail 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 Portfolio Center module to all portfolio management and optimization tools to improve performance of your portfolios.