Correlation Between Jaypee Infratech and Transport

Can any of the company-specific risk be diversified away by investing in both Jaypee Infratech and Transport 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 Transport 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 Transport of, you can compare the effects of market volatilities on Jaypee Infratech and Transport 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 Transport. Check out your portfolio center. Please also check ongoing floating volatility patterns of Jaypee Infratech and Transport.

Diversification Opportunities for Jaypee Infratech and Transport

0.0

Correlation Coefficient

Jaypee Infratech  Transport

Pay attention - limited upside

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

Pair Corralation between Jaypee Infratech and Transport

Assuming the 90 days trading horizon Jaypee Infratech Limited is expected to under-perform the Transport. But the stock apears to be less risky and, when comparing its historical volatility, Jaypee Infratech Limited is 5.99 times less risky than Transport. The stock trades about -0.07 of its potential returns per unit of risk. The Transport of is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest  61,552  in Transport of on October 11, 2024 and sell it today you would earn a total of  48,058  from holding Transport of or generate 78.08% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	99.59%
Values	Daily Returns

Jaypee Infratech Limited  vs.  Transport of

Jaypee Infratech

Risk-Adjusted Performance

0 of 100

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 latest stock price disturbance, may contribute to short-term losses for the investors.

Transport

Risk-Adjusted Performance

3 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Transport of are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of rather unfluctuating technical and fundamental indicators, Transport may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Pair Trading with Jaypee Infratech and Transport

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

The idea behind Jaypee Infratech Limited and Transport of 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 Portfolio Center module to all portfolio management and optimization tools to improve performance of your portfolios.