Correlation Between Jaypee Infratech and PB Fintech

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

By analyzing existing cross correlation between Jaypee Infratech Limited and PB Fintech Limited, you can compare the effects of market volatilities on Jaypee Infratech and PB Fintech 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 Jaypee Infratech with a short position of PB Fintech. Check out your portfolio center. Please also check ongoing floating volatility patterns of Jaypee Infratech and PB Fintech.

Diversification Opportunities for Jaypee Infratech and PB Fintech

0.0

Correlation Coefficient

Jaypee Infratech  PB Fintech

Pay attention - limited upside

The 3 months correlation between Jaypee and POLICYBZR is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Jaypee Infratech Limited and PB Fintech Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PB Fintech Limited and Jaypee Infratech 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 Jaypee Infratech Limited are associated (or correlated) with PB Fintech. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PB Fintech Limited has no effect on the direction of Jaypee Infratech i.e., Jaypee Infratech and PB Fintech go up and down completely randomly.

Pair Corralation between Jaypee Infratech and PB Fintech

Assuming the 90 days trading horizon Jaypee Infratech is expected to generate 26.86 times less return on investment than PB Fintech. But when comparing it to its historical volatility, Jaypee Infratech Limited is 13.63 times less risky than PB Fintech. It trades about 0.05 of its potential returns per unit of risk. PB Fintech Limited is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest  57,470  in PB Fintech Limited on November 20, 2024 and sell it today you would earn a total of  91,965  from holding PB Fintech Limited or generate 160.02% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	99.79%
Values	Daily Returns

Jaypee Infratech Limited  vs.  PB Fintech Limited

Jaypee Infratech

Risk-Adjusted Performance

Very Weak

Over the last 90 days Jaypee Infratech Limited has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, Jaypee Infratech is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

PB Fintech Limited

Risk-Adjusted Performance

Very Weak

Over the last 90 days PB Fintech Limited has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest uncertain performance, the Stock's fundamental drivers remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

Pair Trading with Jaypee Infratech and PB Fintech

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

The idea behind Jaypee Infratech Limited and PB Fintech Limited 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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.