Correlation Between JNK India and Tribhovandas Bhimji

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

By analyzing existing cross correlation between JNK India and Tribhovandas Bhimji Zaveri, you can compare the effects of market volatilities on JNK India and Tribhovandas Bhimji 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 JNK India with a short position of Tribhovandas Bhimji. Check out your portfolio center. Please also check ongoing floating volatility patterns of JNK India and Tribhovandas Bhimji.

Diversification Opportunities for JNK India and Tribhovandas Bhimji

0.79

Correlation Coefficient

JNK India  Tribhovandas Bhimji

Poor diversification

The 3 months correlation between JNK and Tribhovandas is 0.79. Overlapping area represents the amount of risk that can be diversified away by holding JNK India and Tribhovandas Bhimji Zaveri in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tribhovandas Bhimji and JNK India 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 JNK India are associated (or correlated) with Tribhovandas Bhimji. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tribhovandas Bhimji has no effect on the direction of JNK India i.e., JNK India and Tribhovandas Bhimji go up and down completely randomly.

Pair Corralation between JNK India and Tribhovandas Bhimji

Assuming the 90 days trading horizon JNK India is expected to under-perform the Tribhovandas Bhimji. In addition to that, JNK India is 1.11 times more volatile than Tribhovandas Bhimji Zaveri. It trades about -0.18 of its total potential returns per unit of risk. Tribhovandas Bhimji Zaveri is currently generating about -0.11 per unit of volatility. If you would invest  23,858  in Tribhovandas Bhimji Zaveri on December 26, 2024 and sell it today you would lose (6,035) from holding Tribhovandas Bhimji Zaveri or give up 25.3% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	98.39%
Values	Daily Returns

JNK India  vs.  Tribhovandas Bhimji Zaveri

JNK India

Risk-Adjusted Performance

Very Weak

Over the last 90 days JNK India has generated negative risk-adjusted returns adding no value to investors with long positions. Despite uncertain performance in the last few months, the Stock's fundamental indicators remain fairly strong which may send shares a bit higher in April 2025. The recent confusion may also be a sign of long-lasting up-swing for the firm traders.

Tribhovandas Bhimji

Risk-Adjusted Performance

Very Weak

Over the last 90 days Tribhovandas Bhimji Zaveri has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unsteady performance in the last few months, the Stock's technical and fundamental 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 JNK India and Tribhovandas Bhimji

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

The idea behind JNK India and Tribhovandas Bhimji Zaveri 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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.