Correlation Between JTL Industries and Sunflag Iron

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

By analyzing existing cross correlation between JTL Industries and Sunflag Iron And, you can compare the effects of market volatilities on JTL Industries and Sunflag Iron 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 Sunflag Iron. Check out your portfolio center. Please also check ongoing floating volatility patterns of JTL Industries and Sunflag Iron.

Diversification Opportunities for JTL Industries and Sunflag Iron

0.35

Correlation Coefficient

JTL Industries  Sunflag Iron

Weak diversification

The 3 months correlation between JTL and Sunflag is 0.35. Overlapping area represents the amount of risk that can be diversified away by holding JTL Industries and Sunflag Iron And in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sunflag Iron And 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 Sunflag Iron. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sunflag Iron And has no effect on the direction of JTL Industries i.e., JTL Industries and Sunflag Iron go up and down completely randomly.

Pair Corralation between JTL Industries and Sunflag Iron

Assuming the 90 days trading horizon JTL Industries is expected to under-perform the Sunflag Iron. In addition to that, JTL Industries is 2.18 times more volatile than Sunflag Iron And. It trades about -0.15 of its total potential returns per unit of risk. Sunflag Iron And is currently generating about 0.11 per unit of volatility. If you would invest  21,277  in Sunflag Iron And on September 13, 2024 and sell it today you would earn a total of  4,359  from holding Sunflag Iron And or generate 20.49% return on investment over 90 days.

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

JTL Industries  vs.  Sunflag Iron And

JTL Industries

Risk-Adjusted Performance

0 of 100

Very Weak

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

Sunflag Iron And

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Sunflag Iron And are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Despite nearly weak essential indicators, Sunflag Iron reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with JTL Industries and Sunflag Iron

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

The idea behind JTL Industries and Sunflag Iron And 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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .