Correlation Between Jayant Agro and Diligent Media

Can any of the company-specific risk be diversified away by investing in both Jayant Agro and Diligent Media 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 Diligent Media 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 Diligent Media, you can compare the effects of market volatilities on Jayant Agro and Diligent Media 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 Diligent Media. Check out your portfolio center. Please also check ongoing floating volatility patterns of Jayant Agro and Diligent Media.

Diversification Opportunities for Jayant Agro and Diligent Media

0.69

Correlation Coefficient

Jayant Agro  Diligent Media

Poor diversification

The 3 months correlation between Jayant and Diligent is 0.69. Overlapping area represents the amount of risk that can be diversified away by holding Jayant Agro Organics and Diligent Media in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Diligent Media 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 Diligent Media. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Diligent Media has no effect on the direction of Jayant Agro i.e., Jayant Agro and Diligent Media go up and down completely randomly.

Pair Corralation between Jayant Agro and Diligent Media

Assuming the 90 days trading horizon Jayant Agro is expected to generate 1.64 times less return on investment than Diligent Media. But when comparing it to its historical volatility, Jayant Agro Organics is 1.66 times less risky than Diligent Media. It trades about 0.03 of its potential returns per unit of risk. Diligent Media is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest  575.00  in Diligent Media on September 12, 2024 and sell it today you would earn a total of  13.00  from holding Diligent Media or generate 2.26% 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.  Diligent Media

Jayant Agro Organics

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Jayant Agro Organics are ranked lower than 2 (%) 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 newest stock price disarray, may contribute to short-term losses for the investors.

Diligent Media

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Diligent Media are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite fairly strong fundamental indicators, Diligent Media is not utilizing all of its potentials. The latest stock price confusion, may contribute to short-horizon losses for the traders.

Pair Trading with Jayant Agro and Diligent Media

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

The idea behind Jayant Agro Organics and Diligent Media 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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.