Correlation Between JGCHEMICALS and Sanginita Chemicals

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

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

Diversification Opportunities for JGCHEMICALS and Sanginita Chemicals

0.28

Correlation Coefficient

JGCHEMICALS  Sanginita Chemicals

Modest diversification

The 3 months correlation between JGCHEMICALS and Sanginita is 0.28. Overlapping area represents the amount of risk that can be diversified away by holding JGCHEMICALS LIMITED and Sanginita Chemicals Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sanginita Chemicals 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 Sanginita Chemicals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sanginita Chemicals has no effect on the direction of JGCHEMICALS i.e., JGCHEMICALS and Sanginita Chemicals go up and down completely randomly.

Pair Corralation between JGCHEMICALS and Sanginita Chemicals

Assuming the 90 days trading horizon JGCHEMICALS LIMITED is expected to generate 1.9 times more return on investment than Sanginita Chemicals. However, JGCHEMICALS is 1.9 times more volatile than Sanginita Chemicals Limited. It trades about 0.0 of its potential returns per unit of risk. Sanginita Chemicals Limited is currently generating about -0.04 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	Very Weak
Accuracy	100.0%
Values	Daily Returns

JGCHEMICALS LIMITED  vs.  Sanginita Chemicals Limited

JGCHEMICALS LIMITED

Risk-Adjusted Performance

0 of 100

Very 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.

Sanginita Chemicals

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Sanginita Chemicals Limited has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fairly strong forward indicators, Sanginita Chemicals is not utilizing all of its potentials. The newest stock price confusion, may contribute to short-horizon losses for the traders.

Pair Trading with JGCHEMICALS and Sanginita Chemicals

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

The idea behind JGCHEMICALS LIMITED and Sanginita Chemicals 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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.