Correlation Between Jayant Agro and Mrs Bectors

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

By analyzing existing cross correlation between Jayant Agro Organics and Mrs Bectors Food, you can compare the effects of market volatilities on Jayant Agro and Mrs Bectors 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 Jayant Agro with a short position of Mrs Bectors. Check out your portfolio center. Please also check ongoing floating volatility patterns of Jayant Agro and Mrs Bectors.

Diversification Opportunities for Jayant Agro and Mrs Bectors

0.63

Correlation Coefficient

Jayant Agro  Mrs Bectors

Poor diversification

The 3 months correlation between Jayant and Mrs is 0.63. Overlapping area represents the amount of risk that can be diversified away by holding Jayant Agro Organics and Mrs Bectors Food in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mrs Bectors Food and Jayant Agro 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 Jayant Agro Organics are associated (or correlated) with Mrs Bectors. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mrs Bectors Food has no effect on the direction of Jayant Agro i.e., Jayant Agro and Mrs Bectors go up and down completely randomly.

Pair Corralation between Jayant Agro and Mrs Bectors

Assuming the 90 days trading horizon Jayant Agro Organics is expected to generate 1.03 times more return on investment than Mrs Bectors. However, Jayant Agro is 1.03 times more volatile than Mrs Bectors Food. It trades about 0.02 of its potential returns per unit of risk. Mrs Bectors Food is currently generating about -0.1 per unit of risk. If you would invest  27,325  in Jayant Agro Organics on October 26, 2024 and sell it today you would earn a total of  485.00  from holding Jayant Agro Organics or generate 1.77% return on investment over 90 days.

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

Jayant Agro Organics  vs.  Mrs Bectors Food

Jayant Agro Organics

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Jayant Agro Organics are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of very healthy basic indicators, Jayant Agro is not utilizing all of its potentials. The latest stock price disarray, may contribute to short-term losses for the investors.

Mrs Bectors Food

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Mrs Bectors Food has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's basic indicators remain nearly stable which may send shares a bit higher in February 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Pair Trading with Jayant Agro and Mrs Bectors

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

The idea behind Jayant Agro Organics and Mrs Bectors Food 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.

Check out your portfolio center.

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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.