Correlation Between JTL Industries and Plastiblends India

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

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

Diversification Opportunities for JTL Industries and Plastiblends India

0.57

Correlation Coefficient

JTL Industries  Plastiblends India

Very weak diversification

The 3 months correlation between JTL and Plastiblends is 0.57. Overlapping area represents the amount of risk that can be diversified away by holding JTL Industries and Plastiblends India Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Plastiblends India and JTL Industries 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 JTL Industries are associated (or correlated) with Plastiblends India. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Plastiblends India has no effect on the direction of JTL Industries i.e., JTL Industries and Plastiblends India go up and down completely randomly.

Pair Corralation between JTL Industries and Plastiblends India

Assuming the 90 days trading horizon JTL Industries is expected to generate 1.17 times more return on investment than Plastiblends India. However, JTL Industries is 1.17 times more volatile than Plastiblends India Limited. It trades about 0.03 of its potential returns per unit of risk. Plastiblends India Limited is currently generating about -0.12 per unit of risk. If you would invest  10,614  in JTL Industries on October 11, 2024 and sell it today you would earn a total of  368.00  from holding JTL Industries or generate 3.47% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	98.39%
Values	Daily Returns

JTL Industries  vs.  Plastiblends India Limited

JTL Industries

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in JTL Industries are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong forward indicators, JTL Industries is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Plastiblends India

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Plastiblends India Limited has generated negative risk-adjusted returns adding no value to investors with long positions. Despite uncertain performance in the last few months, the Stock's essential indicators remain somewhat strong which may send shares a bit higher in February 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Pair Trading with JTL Industries and Plastiblends India

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

The idea behind JTL Industries and Plastiblends India Limited 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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.