Correlation Between Hemisphere Properties and JGCHEMICALS

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

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

Diversification Opportunities for Hemisphere Properties and JGCHEMICALS

-0.29

Correlation Coefficient

Hemisphere Properties  JGCHEMICALS

Very good diversification

The 3 months correlation between Hemisphere and JGCHEMICALS is -0.29. Overlapping area represents the amount of risk that can be diversified away by holding Hemisphere Properties India and JGCHEMICALS LIMITED in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on JGCHEMICALS LIMITED and Hemisphere Properties 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 Hemisphere Properties India are associated (or correlated) with JGCHEMICALS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of JGCHEMICALS LIMITED has no effect on the direction of Hemisphere Properties i.e., Hemisphere Properties and JGCHEMICALS go up and down completely randomly.

Pair Corralation between Hemisphere Properties and JGCHEMICALS

Assuming the 90 days trading horizon Hemisphere Properties India is expected to generate 1.39 times more return on investment than JGCHEMICALS. However, Hemisphere Properties is 1.39 times more volatile than JGCHEMICALS LIMITED. It trades about -0.13 of its potential returns per unit of risk. JGCHEMICALS LIMITED is currently generating about -0.26 per unit of risk. If you would invest  17,763  in Hemisphere Properties India on October 8, 2024 and sell it today you would lose (1,304) from holding Hemisphere Properties India or give up 7.34% of portfolio value over 90 days.

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

Hemisphere Properties India  vs.  JGCHEMICALS LIMITED

Hemisphere Properties

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Hemisphere Properties India has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy basic indicators, Hemisphere Properties is not utilizing all of its potentials. The recent stock price disarray, may contribute to short-term losses for the investors.

JGCHEMICALS LIMITED

Risk-Adjusted Performance

3 of 100

Insignificant

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

Pair Trading with Hemisphere Properties and JGCHEMICALS

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

The idea behind Hemisphere Properties India and JGCHEMICALS 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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.