Correlation Between Maithan Alloys and Jaypee Infratech

Can any of the company-specific risk be diversified away by investing in both Maithan Alloys and Jaypee Infratech 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 Maithan Alloys and Jaypee Infratech into the same portfolio, which is an essential part of the fundamental portfolio management process.

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

Diversification Opportunities for Maithan Alloys and Jaypee Infratech

0.0

Correlation Coefficient

Maithan Alloys  Jaypee Infratech

Pay attention - limited upside

The 3 months correlation between Maithan and Jaypee is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Maithan Alloys Limited and Jaypee Infratech Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jaypee Infratech and Maithan Alloys 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 Maithan Alloys Limited are associated (or correlated) with Jaypee Infratech. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jaypee Infratech has no effect on the direction of Maithan Alloys i.e., Maithan Alloys and Jaypee Infratech go up and down completely randomly.

Pair Corralation between Maithan Alloys and Jaypee Infratech

If you would invest  106,795  in Maithan Alloys Limited on September 24, 2024 and sell it today you would earn a total of  10,365  from holding Maithan Alloys Limited or generate 9.71% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Maithan Alloys Limited  vs.  Jaypee Infratech Limited

Maithan Alloys

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Maithan Alloys Limited has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy basic indicators, Maithan Alloys is not utilizing all of its potentials. The latest stock price disarray, may contribute to short-term losses for the investors.

Jaypee Infratech

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with Maithan Alloys and Jaypee Infratech

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

The idea behind Maithan Alloys Limited and Jaypee Infratech 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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.