Correlation Between JGCHEMICALS and Maithan Alloys
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By analyzing existing cross correlation between JGCHEMICALS LIMITED and Maithan Alloys Limited, you can compare the effects of market volatilities on JGCHEMICALS and Maithan Alloys 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 Maithan Alloys. Check out your portfolio center. Please also check ongoing floating volatility patterns of JGCHEMICALS and Maithan Alloys.
Diversification Opportunities for JGCHEMICALS and Maithan Alloys
0.55 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between JGCHEMICALS and Maithan is 0.55. Overlapping area represents the amount of risk that can be diversified away by holding JGCHEMICALS LIMITED and Maithan Alloys Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Maithan Alloys 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 Maithan Alloys. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Maithan Alloys has no effect on the direction of JGCHEMICALS i.e., JGCHEMICALS and Maithan Alloys go up and down completely randomly.
Pair Corralation between JGCHEMICALS and Maithan Alloys
Assuming the 90 days trading horizon JGCHEMICALS LIMITED is expected to under-perform the Maithan Alloys. But the stock apears to be less risky and, when comparing its historical volatility, JGCHEMICALS LIMITED is 1.03 times less risky than Maithan Alloys. The stock trades about -0.1 of its potential returns per unit of risk. The Maithan Alloys Limited is currently generating about 0.2 of returns per unit of risk over similar time horizon. If you would invest 106,240 in Maithan Alloys Limited on September 23, 2024 and sell it today you would earn a total of 10,920 from holding Maithan Alloys Limited or generate 10.28% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Weak |
Accuracy | 100.0% |
Values | Daily Returns |
JGCHEMICALS LIMITED vs. Maithan Alloys Limited
Performance |
Timeline |
JGCHEMICALS LIMITED |
Maithan Alloys |
JGCHEMICALS and Maithan Alloys Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with JGCHEMICALS and Maithan Alloys
The main advantage of trading using opposite JGCHEMICALS and Maithan Alloys positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if JGCHEMICALS position performs unexpectedly, Maithan Alloys 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 Maithan Alloys will offset losses from the drop in Maithan Alloys' long position.JGCHEMICALS vs. Hindustan Zinc Limited | JGCHEMICALS vs. Vedanta Limited | JGCHEMICALS vs. MOIL Limited | JGCHEMICALS vs. The Orissa Minerals |
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Check out your portfolio center.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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
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