Correlation Between Juniper Hotels and Jindal Steel

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

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

Diversification Opportunities for Juniper Hotels and Jindal Steel

0.67

Correlation Coefficient

Juniper Hotels  Jindal Steel

Poor diversification

The 3 months correlation between Juniper and Jindal is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding Juniper Hotels and Jindal Steel Power in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jindal Steel Power and Juniper Hotels 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 Juniper Hotels are associated (or correlated) with Jindal Steel. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jindal Steel Power has no effect on the direction of Juniper Hotels i.e., Juniper Hotels and Jindal Steel go up and down completely randomly.

Pair Corralation between Juniper Hotels and Jindal Steel

Assuming the 90 days trading horizon Juniper Hotels is expected to generate 1.23 times more return on investment than Jindal Steel. However, Juniper Hotels is 1.23 times more volatile than Jindal Steel Power. It trades about -0.03 of its potential returns per unit of risk. Jindal Steel Power is currently generating about -0.09 per unit of risk. If you would invest  36,505  in Juniper Hotels on September 30, 2024 and sell it today you would lose (1,980) from holding Juniper Hotels or give up 5.42% of portfolio value over 90 days.

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

Juniper Hotels  vs.  Jindal Steel Power

Juniper Hotels

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Juniper Hotels has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable basic indicators, Juniper Hotels is not utilizing all of its potentials. The latest stock price agitation, may contribute to short-term losses for the retail investors.

Jindal Steel Power

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Jindal Steel Power has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest uncertain performance, the Stock's basic indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the firm private investors.

Pair Trading with Juniper Hotels and Jindal Steel

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

The idea behind Juniper Hotels and Jindal Steel Power 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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.