Correlation Between Jupiter Life and Agarwal Industrial

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

By analyzing existing cross correlation between Jupiter Life Line and Agarwal Industrial, you can compare the effects of market volatilities on Jupiter Life and Agarwal Industrial 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 Jupiter Life with a short position of Agarwal Industrial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Jupiter Life and Agarwal Industrial.

Diversification Opportunities for Jupiter Life and Agarwal Industrial

0.41

Correlation Coefficient

Jupiter Life  Agarwal Industrial

Very weak diversification

The 3 months correlation between Jupiter and Agarwal is 0.41. Overlapping area represents the amount of risk that can be diversified away by holding Jupiter Life Line and Agarwal Industrial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Agarwal Industrial and Jupiter Life 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 Jupiter Life Line are associated (or correlated) with Agarwal Industrial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Agarwal Industrial has no effect on the direction of Jupiter Life i.e., Jupiter Life and Agarwal Industrial go up and down completely randomly.

Pair Corralation between Jupiter Life and Agarwal Industrial

Assuming the 90 days trading horizon Jupiter Life Line is expected to generate 0.67 times more return on investment than Agarwal Industrial. However, Jupiter Life Line is 1.5 times less risky than Agarwal Industrial. It trades about 0.03 of its potential returns per unit of risk. Agarwal Industrial is currently generating about -0.11 per unit of risk. If you would invest  156,290  in Jupiter Life Line on December 30, 2024 and sell it today you would earn a total of  3,365  from holding Jupiter Life Line or generate 2.15% return on investment over 90 days.

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

Jupiter Life Line  vs.  Agarwal Industrial

Jupiter Life Line

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Jupiter Life Line are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable basic indicators, Jupiter Life is not utilizing all of its potentials. The latest stock price uproar, may contribute to short-horizon losses for the private investors.

Agarwal Industrial

Risk-Adjusted Performance

Very Weak

Over the last 90 days Agarwal Industrial has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Stock's forward indicators remain rather sound which may send shares a bit higher in April 2025. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

Pair Trading with Jupiter Life and Agarwal Industrial

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

The idea behind Jupiter Life Line and Agarwal Industrial 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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.