Correlation Between NSL Foods and Jasmine International

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

By analyzing existing cross correlation between NSL Foods Public and Jasmine International Public, you can compare the effects of market volatilities on NSL Foods and Jasmine International 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 NSL Foods with a short position of Jasmine International. Check out your portfolio center. Please also check ongoing floating volatility patterns of NSL Foods and Jasmine International.

Diversification Opportunities for NSL Foods and Jasmine International

0.25

Correlation Coefficient

NSL Foods  Jasmine International

Modest diversification

The 3 months correlation between NSL and Jasmine is 0.25. Overlapping area represents the amount of risk that can be diversified away by holding NSL Foods Public and Jasmine International Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jasmine International and NSL Foods 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 NSL Foods Public are associated (or correlated) with Jasmine International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jasmine International has no effect on the direction of NSL Foods i.e., NSL Foods and Jasmine International go up and down completely randomly.

Pair Corralation between NSL Foods and Jasmine International

Assuming the 90 days trading horizon NSL Foods Public is expected to generate 1.04 times more return on investment than Jasmine International. However, NSL Foods is 1.04 times more volatile than Jasmine International Public. It trades about 0.01 of its potential returns per unit of risk. Jasmine International Public is currently generating about -0.03 per unit of risk. If you would invest  3,225  in NSL Foods Public on September 3, 2024 and sell it today you would earn a total of  0.00  from holding NSL Foods Public or generate 0.0% return on investment over 90 days.

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

NSL Foods Public  vs.  Jasmine International Public

NSL Foods Public

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in NSL Foods Public are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite quite weak essential indicators, NSL Foods may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Jasmine International

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with NSL Foods and Jasmine International

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

The idea behind NSL Foods Public and Jasmine International Public 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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..