Correlation Between Jai Balaji and PB Fintech

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

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

Diversification Opportunities for Jai Balaji and PB Fintech

0.86

Correlation Coefficient

Jai Balaji  PB Fintech

Very poor diversification

The 3 months correlation between Jai and POLICYBZR is 0.86. Overlapping area represents the amount of risk that can be diversified away by holding Jai Balaji Industries and PB Fintech Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PB Fintech Limited and Jai Balaji 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 Jai Balaji Industries are associated (or correlated) with PB Fintech. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PB Fintech Limited has no effect on the direction of Jai Balaji i.e., Jai Balaji and PB Fintech go up and down completely randomly.

Pair Corralation between Jai Balaji and PB Fintech

Assuming the 90 days trading horizon Jai Balaji Industries is expected to under-perform the PB Fintech. In addition to that, Jai Balaji is 1.0 times more volatile than PB Fintech Limited. It trades about -0.09 of its total potential returns per unit of risk. PB Fintech Limited is currently generating about -0.09 per unit of volatility. If you would invest  210,785  in PB Fintech Limited on December 28, 2024 and sell it today you would lose (46,070) from holding PB Fintech Limited or give up 21.86% of portfolio value over 90 days.

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

Jai Balaji Industries  vs.  PB Fintech Limited

Jai Balaji Industries

Risk-Adjusted Performance

Very Weak

Over the last 90 days Jai Balaji Industries has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fragile performance in the last few months, the Stock's basic indicators remain somewhat strong which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

PB Fintech Limited

Risk-Adjusted Performance

Very Weak

Over the last 90 days PB Fintech Limited 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 drivers remain somewhat strong which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Pair Trading with Jai Balaji and PB Fintech

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

The idea behind Jai Balaji Industries and PB Fintech 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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.