Correlation Between PB Fintech and Jindal Poly

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

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

Diversification Opportunities for PB Fintech and Jindal Poly

0.59

Correlation Coefficient

PB Fintech  Jindal Poly

Very weak diversification

The 3 months correlation between POLICYBZR and Jindal is 0.59. Overlapping area represents the amount of risk that can be diversified away by holding PB Fintech Limited and Jindal Poly Investment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jindal Poly Investment and PB Fintech 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 PB Fintech Limited are associated (or correlated) with Jindal Poly. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jindal Poly Investment has no effect on the direction of PB Fintech i.e., PB Fintech and Jindal Poly go up and down completely randomly.

Pair Corralation between PB Fintech and Jindal Poly

Assuming the 90 days trading horizon PB Fintech Limited is expected to generate 0.61 times more return on investment than Jindal Poly. However, PB Fintech Limited is 1.63 times less risky than Jindal Poly. It trades about 0.12 of its potential returns per unit of risk. Jindal Poly Investment is currently generating about 0.03 per unit of risk. If you would invest  163,905  in PB Fintech Limited on October 11, 2024 and sell it today you would earn a total of  28,050  from holding PB Fintech Limited or generate 17.11% return on investment over 90 days.

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

PB Fintech Limited  vs.  Jindal Poly Investment

PB Fintech Limited

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in PB Fintech Limited are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Despite somewhat abnormal fundamental drivers, PB Fintech sustained solid returns over the last few months and may actually be approaching a breakup point.

Jindal Poly Investment

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Jindal Poly Investment are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of very weak basic indicators, Jindal Poly may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Pair Trading with PB Fintech and Jindal Poly

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

The idea behind PB Fintech Limited and Jindal Poly Investment 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.

Check out your portfolio center.

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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.