Correlation Between AGI Greenpac and Jyoti CNC

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

By analyzing existing cross correlation between AGI Greenpac Limited and Jyoti CNC Automation, you can compare the effects of market volatilities on AGI Greenpac and Jyoti CNC 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 AGI Greenpac with a short position of Jyoti CNC. Check out your portfolio center. Please also check ongoing floating volatility patterns of AGI Greenpac and Jyoti CNC.

Diversification Opportunities for AGI Greenpac and Jyoti CNC

0.81

Correlation Coefficient

AGI Greenpac  Jyoti CNC

Very poor diversification

The 3 months correlation between AGI and Jyoti is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding AGI Greenpac Limited and Jyoti CNC Automation in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jyoti CNC Automation and AGI Greenpac 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 AGI Greenpac Limited are associated (or correlated) with Jyoti CNC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jyoti CNC Automation has no effect on the direction of AGI Greenpac i.e., AGI Greenpac and Jyoti CNC go up and down completely randomly.

Pair Corralation between AGI Greenpac and Jyoti CNC

Assuming the 90 days trading horizon AGI Greenpac Limited is expected to generate 43.17 times more return on investment than Jyoti CNC. However, AGI Greenpac is 43.17 times more volatile than Jyoti CNC Automation. It trades about 0.14 of its potential returns per unit of risk. Jyoti CNC Automation is currently generating about 0.15 per unit of risk. If you would invest  32,192  in AGI Greenpac Limited on September 28, 2024 and sell it today you would earn a total of  84,198  from holding AGI Greenpac Limited or generate 261.55% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Strong
Accuracy	47.18%
Values	Daily Returns

AGI Greenpac Limited  vs.  Jyoti CNC Automation

AGI Greenpac Limited

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in AGI Greenpac Limited are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. In spite of rather uncertain technical and fundamental indicators, AGI Greenpac exhibited solid returns over the last few months and may actually be approaching a breakup point.

Jyoti CNC Automation

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Jyoti CNC Automation are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. In spite of very conflicting fundamental indicators, Jyoti CNC displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with AGI Greenpac and Jyoti CNC

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

The idea behind AGI Greenpac Limited and Jyoti CNC Automation 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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.