Correlation Between Jerash Holdings and Siriuspoint

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

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

Diversification Opportunities for Jerash Holdings and Siriuspoint

0.8

Correlation Coefficient

Jerash Holdings  Siriuspoint

Very poor diversification

The 3 months correlation between Jerash and Siriuspoint is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding Jerash Holdings and Siriuspoint in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Siriuspoint and Jerash Holdings 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 Jerash Holdings are associated (or correlated) with Siriuspoint. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Siriuspoint has no effect on the direction of Jerash Holdings i.e., Jerash Holdings and Siriuspoint go up and down completely randomly.

Pair Corralation between Jerash Holdings and Siriuspoint

Given the investment horizon of 90 days Jerash Holdings is expected to under-perform the Siriuspoint. But the stock apears to be less risky and, when comparing its historical volatility, Jerash Holdings is 1.2 times less risky than Siriuspoint. The stock trades about 0.0 of its potential returns per unit of risk. The Siriuspoint is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest  642.00  in Siriuspoint on October 11, 2024 and sell it today you would earn a total of  853.00  from holding Siriuspoint or generate 132.87% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Strong
Accuracy	99.8%
Values	Daily Returns

Jerash Holdings  vs.  Siriuspoint

Jerash Holdings

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Jerash Holdings are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. Despite fairly unsteady basic indicators, Jerash Holdings demonstrated solid returns over the last few months and may actually be approaching a breakup point.

Siriuspoint

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Siriuspoint are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively weak basic indicators, Siriuspoint may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Pair Trading with Jerash Holdings and Siriuspoint

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

The idea behind Jerash Holdings and Siriuspoint 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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.