Correlation Between JGCHEMICALS and Hindustan Media

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

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

Diversification Opportunities for JGCHEMICALS and Hindustan Media

0.85

Correlation Coefficient

JGCHEMICALS  Hindustan Media

Very poor diversification

The 3 months correlation between JGCHEMICALS and Hindustan is 0.85. Overlapping area represents the amount of risk that can be diversified away by holding JGCHEMICALS LIMITED and Hindustan Media Ventures in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hindustan Media Ventures 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 Hindustan Media. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hindustan Media Ventures has no effect on the direction of JGCHEMICALS i.e., JGCHEMICALS and Hindustan Media go up and down completely randomly.

Pair Corralation between JGCHEMICALS and Hindustan Media

Assuming the 90 days trading horizon JGCHEMICALS LIMITED is expected to under-perform the Hindustan Media. In addition to that, JGCHEMICALS is 1.05 times more volatile than Hindustan Media Ventures. It trades about -0.19 of its total potential returns per unit of risk. Hindustan Media Ventures is currently generating about -0.08 per unit of volatility. If you would invest  9,370  in Hindustan Media Ventures on December 2, 2024 and sell it today you would lose (1,136) from holding Hindustan Media Ventures or give up 12.12% of portfolio value over 90 days.

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

JGCHEMICALS LIMITED  vs.  Hindustan Media Ventures

JGCHEMICALS LIMITED

Risk-Adjusted Performance

Very Weak

Over the last 90 days JGCHEMICALS LIMITED has generated negative risk-adjusted returns adding no value to investors with long positions. Despite conflicting performance in the last few months, the Stock's technical indicators remain somewhat strong which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Hindustan Media Ventures

Risk-Adjusted Performance

Very Weak

Over the last 90 days Hindustan Media Ventures has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest inconsistent performance, the Stock's basic indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the firm private investors.

Pair Trading with JGCHEMICALS and Hindustan Media

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

The idea behind JGCHEMICALS LIMITED and Hindustan Media Ventures 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 Commodity Directory module to find actively traded commodities issued by global exchanges.