Correlation Between GACM Technologies and JNK India

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

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

Diversification Opportunities for GACM Technologies and JNK India

0.76

Correlation Coefficient

GACM Technologies  JNK India

Poor diversification

The 3 months correlation between GACM and JNK is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding GACM Technologies Limited and JNK India in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on JNK India and GACM Technologies 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 GACM Technologies Limited are associated (or correlated) with JNK India. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of JNK India has no effect on the direction of GACM Technologies i.e., GACM Technologies and JNK India go up and down completely randomly.

Pair Corralation between GACM Technologies and JNK India

Assuming the 90 days trading horizon GACM Technologies Limited is expected to generate 0.46 times more return on investment than JNK India. However, GACM Technologies Limited is 2.15 times less risky than JNK India. It trades about -0.07 of its potential returns per unit of risk. JNK India is currently generating about -0.18 per unit of risk. If you would invest  93.00  in GACM Technologies Limited on December 26, 2024 and sell it today you would lose (9.00) from holding GACM Technologies Limited or give up 9.68% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	98.39%
Values	Daily Returns

GACM Technologies Limited  vs.  JNK India

GACM Technologies

Risk-Adjusted Performance

Very Weak

Over the last 90 days GACM Technologies Limited has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest conflicting performance, the Stock's fundamental indicators remain sound and the latest tumult on Wall Street may also be a sign of longer-term gains for the firm shareholders.

JNK India

Risk-Adjusted Performance

Very Weak

Over the last 90 days JNK India has generated negative risk-adjusted returns adding no value to investors with long positions. Despite uncertain performance in the last few months, the Stock's fundamental indicators remain fairly strong which may send shares a bit higher in April 2025. The recent confusion may also be a sign of long-lasting up-swing for the firm traders.

Pair Trading with GACM Technologies and JNK India

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

The idea behind GACM Technologies Limited and JNK India 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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.