Correlation Between MOIL and JGCHEMICALS

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

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

Diversification Opportunities for MOIL and JGCHEMICALS

0.42

Correlation Coefficient

MOIL  JGCHEMICALS

Very weak diversification

The 3 months correlation between MOIL and JGCHEMICALS is 0.42. Overlapping area represents the amount of risk that can be diversified away by holding MOIL Limited and JGCHEMICALS LIMITED in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on JGCHEMICALS LIMITED and MOIL 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 MOIL Limited are associated (or correlated) with JGCHEMICALS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of JGCHEMICALS LIMITED has no effect on the direction of MOIL i.e., MOIL and JGCHEMICALS go up and down completely randomly.

Pair Corralation between MOIL and JGCHEMICALS

Assuming the 90 days trading horizon MOIL Limited is expected to generate 0.94 times more return on investment than JGCHEMICALS. However, MOIL Limited is 1.06 times less risky than JGCHEMICALS. It trades about 0.03 of its potential returns per unit of risk. JGCHEMICALS LIMITED is currently generating about -0.13 per unit of risk. If you would invest  31,350  in MOIL Limited on December 30, 2024 and sell it today you would earn a total of  950.00  from holding MOIL Limited or generate 3.03% return on investment over 90 days.

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

MOIL Limited  vs.  JGCHEMICALS LIMITED

MOIL Limited

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in MOIL Limited are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable basic indicators, MOIL is not utilizing all of its potentials. The current stock price uproar, may contribute to short-horizon losses for the private investors.

JGCHEMICALS LIMITED

Risk-Adjusted Performance

Very Weak

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

Pair Trading with MOIL and JGCHEMICALS

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

The idea behind MOIL Limited and JGCHEMICALS 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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.