Correlation Between JGCHEMICALS and Automotive Stampings

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

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

Diversification Opportunities for JGCHEMICALS and Automotive Stampings

0.02

Correlation Coefficient

JGCHEMICALS  Automotive Stampings

Significant diversification

The 3 months correlation between JGCHEMICALS and Automotive is 0.02. Overlapping area represents the amount of risk that can be diversified away by holding JGCHEMICALS LIMITED and Automotive Stampings and in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Automotive Stampings and 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 Automotive Stampings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Automotive Stampings and has no effect on the direction of JGCHEMICALS i.e., JGCHEMICALS and Automotive Stampings go up and down completely randomly.

Pair Corralation between JGCHEMICALS and Automotive Stampings

Assuming the 90 days trading horizon JGCHEMICALS LIMITED is expected to generate 1.65 times more return on investment than Automotive Stampings. However, JGCHEMICALS is 1.65 times more volatile than Automotive Stampings and. It trades about 0.12 of its potential returns per unit of risk. Automotive Stampings and is currently generating about -0.13 per unit of risk. If you would invest  23,792  in JGCHEMICALS LIMITED on September 29, 2024 and sell it today you would earn a total of  17,193  from holding JGCHEMICALS LIMITED or generate 72.26% return on investment over 90 days.

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

JGCHEMICALS LIMITED  vs.  Automotive Stampings and

JGCHEMICALS LIMITED

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in JGCHEMICALS LIMITED are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite somewhat unfluctuating technical indicators, JGCHEMICALS may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Automotive Stampings and

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Automotive Stampings and has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of uncertain performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in January 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Pair Trading with JGCHEMICALS and Automotive Stampings

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

The idea behind JGCHEMICALS LIMITED and Automotive Stampings and 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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.