Correlation Between JS Investments and Sindh Modaraba

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

By analyzing existing cross correlation between JS Investments and Sindh Modaraba Management, you can compare the effects of market volatilities on JS Investments and Sindh Modaraba 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 Sindh Modaraba. Check out your portfolio center. Please also check ongoing floating volatility patterns of JS Investments and Sindh Modaraba.

Diversification Opportunities for JS Investments and Sindh Modaraba

-0.15

Correlation Coefficient

JS Investments  Sindh Modaraba

Good diversification

The 3 months correlation between JSIL and Sindh is -0.15. Overlapping area represents the amount of risk that can be diversified away by holding JS Investments and Sindh Modaraba Management in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sindh Modaraba Management 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 Sindh Modaraba. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sindh Modaraba Management has no effect on the direction of JS Investments i.e., JS Investments and Sindh Modaraba go up and down completely randomly.

Pair Corralation between JS Investments and Sindh Modaraba

Assuming the 90 days trading horizon JS Investments is expected to generate 1.53 times less return on investment than Sindh Modaraba. In addition to that, JS Investments is 1.02 times more volatile than Sindh Modaraba Management. It trades about 0.05 of its total potential returns per unit of risk. Sindh Modaraba Management is currently generating about 0.07 per unit of volatility. If you would invest  532.00  in Sindh Modaraba Management on December 4, 2024 and sell it today you would earn a total of  474.00  from holding Sindh Modaraba Management or generate 89.1% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	97.23%
Values	Daily Returns

JS Investments  vs.  Sindh Modaraba Management

JS Investments

Risk-Adjusted Performance

Very Weak

Over the last 90 days JS Investments has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, JS Investments is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Sindh Modaraba Management

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Sindh Modaraba Management are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite quite weak basic indicators, Sindh Modaraba may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with JS Investments and Sindh Modaraba

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

The idea behind JS Investments and Sindh Modaraba Management 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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.