Correlation Between PB Fintech and JTL Industries

Can any of the company-specific risk be diversified away by investing in both PB Fintech and JTL Industries 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 JTL Industries 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 JTL Industries, you can compare the effects of market volatilities on PB Fintech and JTL Industries 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 JTL Industries. Check out your portfolio center. Please also check ongoing floating volatility patterns of PB Fintech and JTL Industries.

Diversification Opportunities for PB Fintech and JTL Industries

-0.3

Correlation Coefficient

PB Fintech  JTL Industries

Very good diversification

The 3 months correlation between POLICYBZR and JTL is -0.3. Overlapping area represents the amount of risk that can be diversified away by holding PB Fintech Limited and JTL Industries in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on JTL Industries 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 JTL Industries. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of JTL Industries has no effect on the direction of PB Fintech i.e., PB Fintech and JTL Industries go up and down completely randomly.

Pair Corralation between PB Fintech and JTL Industries

Assuming the 90 days trading horizon PB Fintech Limited is expected to generate 0.96 times more return on investment than JTL Industries. However, PB Fintech Limited is 1.04 times less risky than JTL Industries. It trades about 0.32 of its potential returns per unit of risk. JTL Industries is currently generating about -0.04 per unit of risk. If you would invest  166,330  in PB Fintech Limited on October 7, 2024 and sell it today you would earn a total of  55,255  from holding PB Fintech Limited or generate 33.22% return on investment over 90 days.

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

PB Fintech Limited  vs.  JTL Industries

PB Fintech Limited

Risk-Adjusted Performance

17 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in PB Fintech Limited are ranked lower than 17 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak fundamental drivers, PB Fintech sustained solid returns over the last few months and may actually be approaching a breakup point.

JTL Industries

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with PB Fintech and JTL Industries

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

The idea behind PB Fintech Limited and JTL Industries 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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.