Correlation Between JGCHEMICALS and SBI Life

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

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

Diversification Opportunities for JGCHEMICALS and SBI Life

-0.24

Correlation Coefficient

JGCHEMICALS  SBI Life

Very good diversification

The 3 months correlation between JGCHEMICALS and SBI is -0.24. Overlapping area represents the amount of risk that can be diversified away by holding JGCHEMICALS LIMITED and SBI Life Insurance in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SBI Life Insurance 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 SBI Life. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SBI Life Insurance has no effect on the direction of JGCHEMICALS i.e., JGCHEMICALS and SBI Life go up and down completely randomly.

Pair Corralation between JGCHEMICALS and SBI Life

Assuming the 90 days trading horizon JGCHEMICALS LIMITED is expected to under-perform the SBI Life. In addition to that, JGCHEMICALS is 2.12 times more volatile than SBI Life Insurance. It trades about -0.11 of its total potential returns per unit of risk. SBI Life Insurance is currently generating about 0.14 per unit of volatility. If you would invest  138,437  in SBI Life Insurance on December 25, 2024 and sell it today you would earn a total of  18,543  from holding SBI Life Insurance or generate 13.39% return on investment over 90 days.

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

JGCHEMICALS LIMITED  vs.  SBI Life Insurance

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 inconsistent 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.

SBI Life Insurance

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in SBI Life Insurance are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady forward indicators, SBI Life exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with JGCHEMICALS and SBI Life

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

The idea behind JGCHEMICALS LIMITED and SBI Life Insurance 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.

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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..