Correlation Between Electrovaya Common and JBTMarel Corp

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

By analyzing existing cross correlation between Electrovaya Common Shares and JBTMarel Corp, you can compare the effects of market volatilities on Electrovaya Common and JBTMarel Corp 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 Electrovaya Common with a short position of JBTMarel Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Electrovaya Common and JBTMarel Corp.

Diversification Opportunities for Electrovaya Common and JBTMarel Corp

0.57

Correlation Coefficient

Electrovaya Common  JBTMarel Corp

Very weak diversification

The 3 months correlation between Electrovaya and JBTMarel is 0.57. Overlapping area represents the amount of risk that can be diversified away by holding Electrovaya Common Shares and JBTMarel Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on JBTMarel Corp and Electrovaya Common 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 Electrovaya Common Shares are associated (or correlated) with JBTMarel Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of JBTMarel Corp has no effect on the direction of Electrovaya Common i.e., Electrovaya Common and JBTMarel Corp go up and down completely randomly.

Pair Corralation between Electrovaya Common and JBTMarel Corp

Given the investment horizon of 90 days Electrovaya Common Shares is expected to generate 1.87 times more return on investment than JBTMarel Corp. However, Electrovaya Common is 1.87 times more volatile than JBTMarel Corp. It trades about 0.25 of its potential returns per unit of risk. JBTMarel Corp is currently generating about 0.0 per unit of risk. If you would invest  242.00  in Electrovaya Common Shares on October 26, 2024 and sell it today you would earn a total of  36.00  from holding Electrovaya Common Shares or generate 14.88% return on investment over 90 days.

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

Electrovaya Common Shares  vs.  JBTMarel Corp

Electrovaya Common Shares

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Electrovaya Common Shares are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Electrovaya Common sustained solid returns over the last few months and may actually be approaching a breakup point.

JBTMarel Corp

Risk-Adjusted Performance

8 of 100

OK

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

Pair Trading with Electrovaya Common and JBTMarel Corp

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

The idea behind Electrovaya Common Shares and JBTMarel Corp 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 Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.