Correlation Between JS Investments and Agha Steel

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

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

Diversification Opportunities for JS Investments and Agha Steel

-0.46

Correlation Coefficient

JS Investments  Agha Steel

Very good diversification

The 3 months correlation between JSIL and Agha is -0.46. Overlapping area represents the amount of risk that can be diversified away by holding JS Investments and Agha Steel Industries in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Agha Steel Industries and JS Investments 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 JS Investments are associated (or correlated) with Agha Steel. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Agha Steel Industries has no effect on the direction of JS Investments i.e., JS Investments and Agha Steel go up and down completely randomly.

Pair Corralation between JS Investments and Agha Steel

Assuming the 90 days trading horizon JS Investments is expected to under-perform the Agha Steel. In addition to that, JS Investments is 1.7 times more volatile than Agha Steel Industries. It trades about -0.04 of its total potential returns per unit of risk. Agha Steel Industries is currently generating about 0.08 per unit of volatility. If you would invest  1,031  in Agha Steel Industries on October 23, 2024 and sell it today you would earn a total of  35.00  from holding Agha Steel Industries or generate 3.39% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

JS Investments  vs.  Agha Steel Industries

JS Investments

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in JS Investments are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, JS Investments may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Agha Steel Industries

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Agha Steel Industries has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest weak performance, the Stock's basic indicators 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 JS Investments and Agha Steel

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

The idea behind JS Investments and Agha Steel Industries 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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .