Correlation Between JGCHEMICALS and Aptech

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

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

Diversification Opportunities for JGCHEMICALS and Aptech

0.18

Correlation Coefficient

JGCHEMICALS  Aptech

Average diversification

The 3 months correlation between JGCHEMICALS and Aptech is 0.18. Overlapping area represents the amount of risk that can be diversified away by holding JGCHEMICALS LIMITED and Aptech Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aptech Limited and JGCHEMICALS 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 JGCHEMICALS LIMITED are associated (or correlated) with Aptech. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aptech Limited has no effect on the direction of JGCHEMICALS i.e., JGCHEMICALS and Aptech go up and down completely randomly.

Pair Corralation between JGCHEMICALS and Aptech

Assuming the 90 days trading horizon JGCHEMICALS LIMITED is expected to generate 1.31 times more return on investment than Aptech. However, JGCHEMICALS is 1.31 times more volatile than Aptech Limited. It trades about 0.0 of its potential returns per unit of risk. Aptech Limited is currently generating about 0.0 per unit of risk. If you would invest  38,015  in JGCHEMICALS LIMITED on October 23, 2024 and sell it today you would lose (1,805) from holding JGCHEMICALS LIMITED or give up 4.75% of portfolio value over 90 days.

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

JGCHEMICALS LIMITED  vs.  Aptech Limited

JGCHEMICALS LIMITED

Risk-Adjusted Performance

0 of 100

Weak

Over the last 90 days JGCHEMICALS LIMITED has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong technical indicators, JGCHEMICALS is not utilizing all of its potentials. The recent stock price disturbance, may contribute to short-term losses for the investors.

Aptech Limited

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Aptech Limited has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable fundamental indicators, Aptech is not utilizing all of its potentials. The latest stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with JGCHEMICALS and Aptech

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

The idea behind JGCHEMICALS LIMITED and Aptech 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 CEOs Directory module to screen CEOs from public companies around the world.