Correlation Between JS Investments and Nimir Industrial
Can any of the company-specific risk be diversified away by investing in both JS Investments and Nimir Industrial 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 Nimir Industrial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between JS Investments and Nimir Industrial Chemical, you can compare the effects of market volatilities on JS Investments and Nimir Industrial 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 Nimir Industrial. Check out your portfolio center. Please also check ongoing floating volatility patterns of JS Investments and Nimir Industrial.
Diversification Opportunities for JS Investments and Nimir Industrial
0.68 | Correlation Coefficient |
Poor diversification
The 3 months correlation between JSIL and Nimir is 0.68. Overlapping area represents the amount of risk that can be diversified away by holding JS Investments and Nimir Industrial Chemical in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nimir Industrial Chemical 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 Nimir Industrial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nimir Industrial Chemical has no effect on the direction of JS Investments i.e., JS Investments and Nimir Industrial go up and down completely randomly.
Pair Corralation between JS Investments and Nimir Industrial
Assuming the 90 days trading horizon JS Investments is expected to generate 2.66 times more return on investment than Nimir Industrial. However, JS Investments is 2.66 times more volatile than Nimir Industrial Chemical. It trades about 0.14 of its potential returns per unit of risk. Nimir Industrial Chemical is currently generating about 0.37 per unit of risk. If you would invest 2,237 in JS Investments on September 15, 2024 and sell it today you would earn a total of 230.00 from holding JS Investments or generate 10.28% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Significant |
Accuracy | 100.0% |
Values | Daily Returns |
JS Investments vs. Nimir Industrial Chemical
Performance |
Timeline |
JS Investments |
Nimir Industrial Chemical |
JS Investments and Nimir Industrial Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with JS Investments and Nimir Industrial
The main advantage of trading using opposite JS Investments and Nimir Industrial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if JS Investments position performs unexpectedly, Nimir Industrial 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 Nimir Industrial will offset losses from the drop in Nimir Industrial's long position.JS Investments vs. Masood Textile Mills | JS Investments vs. Fauji Foods | JS Investments vs. KSB Pumps | JS Investments vs. Mari Petroleum |
Nimir Industrial vs. Masood Textile Mills | Nimir Industrial vs. Fauji Foods | Nimir Industrial vs. KSB Pumps | Nimir Industrial vs. Mari Petroleum |
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 Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
Other Complementary Tools
Theme Ratings Determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
Portfolio File Import Quickly import all of your third-party portfolios from your local drive in csv format | |
Money Managers Screen money managers from public funds and ETFs managed around the world | |
Portfolio Diagnostics Use generated alerts and portfolio events aggregator to diagnose current holdings | |
Pair Correlation Compare performance and examine fundamental relationship between any two equity instruments |