Correlation Between Gatron Industries and JS Global

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

By analyzing existing cross correlation between Gatron Industries and JS Global Banking, you can compare the effects of market volatilities on Gatron Industries and JS Global 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 Gatron Industries with a short position of JS Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gatron Industries and JS Global.

Diversification Opportunities for Gatron Industries and JS Global

-0.27

Correlation Coefficient

Gatron Industries  JS Global

Very good diversification

The 3 months correlation between Gatron and JSGBETF is -0.27. Overlapping area represents the amount of risk that can be diversified away by holding Gatron Industries and JS Global Banking in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on JS Global Banking and Gatron Industries 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 Gatron Industries are associated (or correlated) with JS Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of JS Global Banking has no effect on the direction of Gatron Industries i.e., Gatron Industries and JS Global go up and down completely randomly.

Pair Corralation between Gatron Industries and JS Global

Assuming the 90 days trading horizon Gatron Industries is expected to under-perform the JS Global. But the stock apears to be less risky and, when comparing its historical volatility, Gatron Industries is 1.09 times less risky than JS Global. The stock trades about -0.01 of its potential returns per unit of risk. The JS Global Banking is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest  1,140  in JS Global Banking on October 27, 2024 and sell it today you would earn a total of  865.00  from holding JS Global Banking or generate 75.88% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	86.02%
Values	Daily Returns

Gatron Industries  vs.  JS Global Banking

Gatron Industries

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Gatron Industries has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest weak performance, the Stock's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

JS Global Banking

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in JS Global Banking are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite nearly weak technical and fundamental indicators, JS Global may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Pair Trading with Gatron Industries and JS Global

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

The idea behind Gatron Industries and JS Global Banking 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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.