Correlation Between Ethereum and Jindal Stainless

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

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

Diversification Opportunities for Ethereum and Jindal Stainless

0.34

Correlation Coefficient

Ethereum  Jindal Stainless

Weak diversification

The 3 months correlation between Ethereum and Jindal is 0.34. Overlapping area represents the amount of risk that can be diversified away by holding Ethereum and Jindal Stainless Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jindal Stainless and Ethereum 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 Ethereum are associated (or correlated) with Jindal Stainless. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jindal Stainless has no effect on the direction of Ethereum i.e., Ethereum and Jindal Stainless go up and down completely randomly.

Pair Corralation between Ethereum and Jindal Stainless

Assuming the 90 days trading horizon Ethereum is expected to under-perform the Jindal Stainless. In addition to that, Ethereum is 1.66 times more volatile than Jindal Stainless Limited. It trades about -0.2 of its total potential returns per unit of risk. Jindal Stainless Limited is currently generating about -0.09 per unit of volatility. If you would invest  72,685  in Jindal Stainless Limited on December 22, 2024 and sell it today you would lose (10,115) from holding Jindal Stainless Limited or give up 13.92% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	95.31%
Values	Daily Returns

Ethereum  vs.  Jindal Stainless Limited

Ethereum

Risk-Adjusted Performance

Very Weak

Over the last 90 days Ethereum has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unsteady performance in the last few months, the Crypto's technical indicators remain rather sound which may send shares a bit higher in April 2025. The latest tumult may also be a sign of longer-term up-swing for Ethereum shareholders.

Jindal Stainless

Risk-Adjusted Performance

Very Weak

Over the last 90 days Jindal Stainless Limited has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unsteady performance in the last few months, the Stock's technical and fundamental indicators remain rather sound which may send shares a bit higher in April 2025. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

Pair Trading with Ethereum and Jindal Stainless

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

The idea behind Ethereum and Jindal Stainless 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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.