Correlation Between Pritish Nandy and JGCHEMICALS

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

By analyzing existing cross correlation between Pritish Nandy Communications and JGCHEMICALS LIMITED, you can compare the effects of market volatilities on Pritish Nandy and JGCHEMICALS 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 Pritish Nandy with a short position of JGCHEMICALS. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pritish Nandy and JGCHEMICALS.

Diversification Opportunities for Pritish Nandy and JGCHEMICALS

0.32

Correlation Coefficient

Pritish Nandy  JGCHEMICALS

Weak diversification

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

Pair Corralation between Pritish Nandy and JGCHEMICALS

Assuming the 90 days trading horizon Pritish Nandy is expected to generate 15.53 times less return on investment than JGCHEMICALS. But when comparing it to its historical volatility, Pritish Nandy Communications is 1.42 times less risky than JGCHEMICALS. It trades about 0.02 of its potential returns per unit of risk. JGCHEMICALS LIMITED is currently generating about 0.22 of returns per unit of risk over similar time horizon. If you would invest  35,550  in JGCHEMICALS LIMITED on September 4, 2024 and sell it today you would earn a total of  8,455  from holding JGCHEMICALS LIMITED or generate 23.78% return on investment over 90 days.

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

Pritish Nandy Communications  vs.  JGCHEMICALS LIMITED

Pritish Nandy Commun

Risk-Adjusted Performance

0 of 100

Weak

Over the last 90 days Pritish Nandy Communications has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound technical and fundamental indicators, Pritish Nandy is not utilizing all of its potentials. The latest stock price tumult, may contribute to shorter-term losses for the shareholders.

JGCHEMICALS LIMITED

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in JGCHEMICALS LIMITED are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong technical indicators, JGCHEMICALS is not utilizing all of its potentials. The recent stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Pritish Nandy and JGCHEMICALS

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

The idea behind Pritish Nandy Communications and JGCHEMICALS 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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..