Correlation Between Jubilee Life and Ittehad Chemicals

Specify exactly 2 symbols:
Can any of the company-specific risk be diversified away by investing in both Jubilee Life and Ittehad 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 Jubilee Life and Ittehad Chemicals 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 Ittehad Chemicals, you can compare the effects of market volatilities on Jubilee Life and Ittehad 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 Jubilee Life with a short position of Ittehad Chemicals. Check out your portfolio center. Please also check ongoing floating volatility patterns of Jubilee Life and Ittehad Chemicals.

Diversification Opportunities for Jubilee Life and Ittehad Chemicals

0.92
  Correlation Coefficient

Almost no diversification

The 3 months correlation between Jubilee and Ittehad is 0.92. Overlapping area represents the amount of risk that can be diversified away by holding Jubilee Life Insurance and Ittehad Chemicals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ittehad Chemicals 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 Ittehad Chemicals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ittehad Chemicals has no effect on the direction of Jubilee Life i.e., Jubilee Life and Ittehad Chemicals go up and down completely randomly.

Pair Corralation between Jubilee Life and Ittehad Chemicals

Assuming the 90 days trading horizon Jubilee Life is expected to generate 1.43 times less return on investment than Ittehad Chemicals. But when comparing it to its historical volatility, Jubilee Life Insurance is 1.14 times less risky than Ittehad Chemicals. It trades about 0.19 of its potential returns per unit of risk. Ittehad Chemicals is currently generating about 0.24 of returns per unit of risk over similar time horizon. If you would invest  4,211  in Ittehad Chemicals on September 28, 2024 and sell it today you would earn a total of  2,646  from holding Ittehad Chemicals or generate 62.84% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthVery Strong
Accuracy98.41%
ValuesDaily Returns

Jubilee Life Insurance  vs.  Ittehad Chemicals

 Performance 
       Timeline  
Jubilee Life Insurance 

Risk-Adjusted Performance

15 of 100

 
Weak
 
Strong
Good
Compared to the overall equity markets, risk-adjusted returns on investments in Jubilee Life Insurance are ranked lower than 15 (%) of all global equities and portfolios over the last 90 days. Despite quite weak forward indicators, Jubilee Life disclosed solid returns over the last few months and may actually be approaching a breakup point.
Ittehad Chemicals 

Risk-Adjusted Performance

19 of 100

 
Weak
 
Strong
Solid
Compared to the overall equity markets, risk-adjusted returns on investments in Ittehad Chemicals are ranked lower than 19 (%) of all global equities and portfolios over the last 90 days. Even with relatively weak basic indicators, Ittehad Chemicals reported solid returns over the last few months and may actually be approaching a breakup point.

Jubilee Life and Ittehad Chemicals Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Jubilee Life and Ittehad Chemicals

The main advantage of trading using opposite Jubilee Life and Ittehad Chemicals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Jubilee Life position performs unexpectedly, Ittehad 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 Ittehad Chemicals will offset losses from the drop in Ittehad Chemicals' long position.
The idea behind Jubilee Life Insurance and Ittehad Chemicals 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 Stocks Directory module to find actively traded stocks across global markets.

Other Complementary Tools

Cryptocurrency Center
Build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency
Portfolio Comparator
Compare the composition, asset allocations and performance of any two portfolios in your account
Portfolio File Import
Quickly import all of your third-party portfolios from your local drive in csv format
Portfolio Rebalancing
Analyze risk-adjusted returns against different time horizons to find asset-allocation targets
Pair Correlation
Compare performance and examine fundamental relationship between any two equity instruments