Correlation Between Jayant Agro and Ganesh Housing

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

Diversification Opportunities for Jayant Agro and Ganesh Housing

0.17

Correlation Coefficient

Jayant Agro  Ganesh Housing

Average diversification

The 3 months correlation between Jayant and Ganesh is 0.17. Overlapping area represents the amount of risk that can be diversified away by holding Jayant Agro Organics and Ganesh Housing in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ganesh Housing 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 Ganesh Housing. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ganesh Housing has no effect on the direction of Jayant Agro i.e., Jayant Agro and Ganesh Housing go up and down completely randomly.

Pair Corralation between Jayant Agro and Ganesh Housing

Assuming the 90 days trading horizon Jayant Agro is expected to generate 9.39 times less return on investment than Ganesh Housing. But when comparing it to its historical volatility, Jayant Agro Organics is 1.36 times less risky than Ganesh Housing. It trades about 0.02 of its potential returns per unit of risk. Ganesh Housing is currently generating about 0.16 of returns per unit of risk over similar time horizon. If you would invest  100,620  in Ganesh Housing on October 26, 2024 and sell it today you would earn a total of  34,660  from holding Ganesh Housing or generate 34.45% return on investment over 90 days.

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

Jayant Agro Organics  vs.  Ganesh Housing

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.

Ganesh Housing

Risk-Adjusted Performance

12 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Ganesh Housing are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. Despite fairly unsteady basic indicators, Ganesh Housing demonstrated solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Jayant Agro and Ganesh Housing

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

The idea behind Jayant Agro Organics and Ganesh Housing 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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.