Correlation Between JGCHEMICALS and G Tec

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

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

Diversification Opportunities for JGCHEMICALS and G Tec

-0.43

Correlation Coefficient

JGCHEMICALS  G Tec

Very good diversification

The 3 months correlation between JGCHEMICALS and GTECJAINX is -0.43. Overlapping area represents the amount of risk that can be diversified away by holding JGCHEMICALS LIMITED and G Tec Jainx Education in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on G Tec Jainx 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 G Tec. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of G Tec Jainx has no effect on the direction of JGCHEMICALS i.e., JGCHEMICALS and G Tec go up and down completely randomly.

Pair Corralation between JGCHEMICALS and G Tec

Assuming the 90 days trading horizon JGCHEMICALS LIMITED is expected to under-perform the G Tec. But the stock apears to be less risky and, when comparing its historical volatility, JGCHEMICALS LIMITED is 1.59 times less risky than G Tec. The stock trades about -0.37 of its potential returns per unit of risk. The G Tec Jainx Education is currently generating about -0.05 of returns per unit of risk over similar time horizon. If you would invest  3,743  in G Tec Jainx Education on October 26, 2024 and sell it today you would lose (179.00) from holding G Tec Jainx Education or give up 4.78% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	95.24%
Values	Daily Returns

JGCHEMICALS LIMITED  vs.  G Tec Jainx Education

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 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.

G Tec Jainx

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days G Tec Jainx Education has generated negative risk-adjusted returns adding no value to investors with long positions. Despite uncertain performance in the last few months, the Stock's forward indicators remain fairly strong which may send shares a bit higher in February 2025. The recent confusion may also be a sign of long-lasting up-swing for the firm traders.

Pair Trading with JGCHEMICALS and G Tec

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

The idea behind JGCHEMICALS LIMITED and G Tec Jainx Education 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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.