Correlation Between Jerash Holdings and EMBARQ

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

By analyzing existing cross correlation between Jerash Holdings and EMBARQ P 7995, you can compare the effects of market volatilities on Jerash Holdings and EMBARQ 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 EMBARQ. Check out your portfolio center. Please also check ongoing floating volatility patterns of Jerash Holdings and EMBARQ.

Diversification Opportunities for Jerash Holdings and EMBARQ

0.56

Correlation Coefficient

Jerash Holdings  EMBARQ

Very weak diversification

The 3 months correlation between Jerash and EMBARQ is 0.56. Overlapping area represents the amount of risk that can be diversified away by holding Jerash Holdings and EMBARQ P 7995 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on EMBARQ P 7995 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 EMBARQ. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of EMBARQ P 7995 has no effect on the direction of Jerash Holdings i.e., Jerash Holdings and EMBARQ go up and down completely randomly.

Pair Corralation between Jerash Holdings and EMBARQ

Given the investment horizon of 90 days Jerash Holdings is expected to generate 5.75 times less return on investment than EMBARQ. But when comparing it to its historical volatility, Jerash Holdings is 6.82 times less risky than EMBARQ. It trades about 0.04 of its potential returns per unit of risk. EMBARQ P 7995 is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest  6,014  in EMBARQ P 7995 on October 7, 2024 and sell it today you would lose (1,705) from holding EMBARQ P 7995 or give up 28.35% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	99.56%
Values	Daily Returns

Jerash Holdings  vs.  EMBARQ P 7995

Jerash Holdings

Risk-Adjusted Performance

12 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Jerash Holdings are ranked lower than 12 (%) 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.

EMBARQ P 7995

Risk-Adjusted Performance

4 of 100

Very Weak

Compared to the overall equity markets, risk-adjusted returns on investments in EMBARQ P 7995 are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite somewhat conflicting basic indicators, EMBARQ sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Jerash Holdings and EMBARQ

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

The idea behind Jerash Holdings and EMBARQ P 7995 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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.