Correlation Between Jubilee Life and Aisha Steel

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

By analyzing existing cross correlation between Jubilee Life Insurance and Aisha Steel Mills, you can compare the effects of market volatilities on Jubilee Life and Aisha Steel 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 Jubilee Life with a short position of Aisha Steel. Check out your portfolio center. Please also check ongoing floating volatility patterns of Jubilee Life and Aisha Steel.

Diversification Opportunities for Jubilee Life and Aisha Steel

0.55

Correlation Coefficient

Jubilee Life  Aisha Steel

Very weak diversification

The 3 months correlation between Jubilee and Aisha is 0.55. Overlapping area represents the amount of risk that can be diversified away by holding Jubilee Life Insurance and Aisha Steel Mills in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aisha Steel Mills and Jubilee 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 Jubilee Life Insurance are associated (or correlated) with Aisha Steel. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aisha Steel Mills has no effect on the direction of Jubilee Life i.e., Jubilee Life and Aisha Steel go up and down completely randomly.

Pair Corralation between Jubilee Life and Aisha Steel

Assuming the 90 days trading horizon Jubilee Life Insurance is expected to under-perform the Aisha Steel. But the stock apears to be less risky and, when comparing its historical volatility, Jubilee Life Insurance is 1.44 times less risky than Aisha Steel. The stock trades about -0.1 of its potential returns per unit of risk. The Aisha Steel Mills is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest  1,009  in Aisha Steel Mills on December 5, 2024 and sell it today you would earn a total of  25.00  from holding Aisha Steel Mills or generate 2.48% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	95.08%
Values	Daily Returns

Jubilee Life Insurance  vs.  Aisha Steel Mills

Jubilee Life Insurance

Risk-Adjusted Performance

Very Weak

Over the last 90 days Jubilee Life Insurance has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's forward indicators remain quite persistent which may send shares a bit higher in April 2025. The latest mess may also be a sign of long-standing up-swing for the company institutional investors.

Aisha Steel Mills

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Aisha Steel Mills are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Even with relatively invariable basic indicators, Aisha Steel is not utilizing all of its potentials. The current stock price agitation, may contribute to short-term losses for the retail investors.

Pair Trading with Jubilee Life and Aisha Steel

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

The idea behind Jubilee Life Insurance and Aisha Steel Mills 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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.