Correlation Between JB Chemicals and Amrutanjan Health

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

By analyzing existing cross correlation between JB Chemicals Pharmaceuticals and Amrutanjan Health Care, you can compare the effects of market volatilities on JB Chemicals and Amrutanjan Health 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 JB Chemicals with a short position of Amrutanjan Health. Check out your portfolio center. Please also check ongoing floating volatility patterns of JB Chemicals and Amrutanjan Health.

Diversification Opportunities for JB Chemicals and Amrutanjan Health

0.28

Correlation Coefficient

JB Chemicals  Amrutanjan Health

Modest diversification

The 3 months correlation between JBCHEPHARM and Amrutanjan is 0.28. Overlapping area represents the amount of risk that can be diversified away by holding JB Chemicals Pharmaceuticals and Amrutanjan Health Care in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Amrutanjan Health Care and JB Chemicals 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 JB Chemicals Pharmaceuticals are associated (or correlated) with Amrutanjan Health. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Amrutanjan Health Care has no effect on the direction of JB Chemicals i.e., JB Chemicals and Amrutanjan Health go up and down completely randomly.

Pair Corralation between JB Chemicals and Amrutanjan Health

Assuming the 90 days trading horizon JB Chemicals Pharmaceuticals is expected to generate 0.94 times more return on investment than Amrutanjan Health. However, JB Chemicals Pharmaceuticals is 1.06 times less risky than Amrutanjan Health. It trades about 0.05 of its potential returns per unit of risk. Amrutanjan Health Care is currently generating about 0.04 per unit of risk. If you would invest  149,675  in JB Chemicals Pharmaceuticals on October 11, 2024 and sell it today you would earn a total of  39,960  from holding JB Chemicals Pharmaceuticals or generate 26.7% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	99.65%
Values	Daily Returns

JB Chemicals Pharmaceuticals  vs.  Amrutanjan Health Care

JB Chemicals Pharmac

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in JB Chemicals Pharmaceuticals are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite fairly strong basic indicators, JB Chemicals is not utilizing all of its potentials. The newest stock price confusion, may contribute to short-horizon losses for the traders.

Amrutanjan Health Care

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Amrutanjan Health Care has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest inconsistent performance, the Stock's forward-looking indicators remain healthy and the recent disarray on Wall Street may also be a sign of long period gains for the firm investors.

Pair Trading with JB Chemicals and Amrutanjan Health

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

The idea behind JB Chemicals Pharmaceuticals and Amrutanjan Health Care 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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.