Correlation Between Shaily Engineering and JTL Industries

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

By analyzing existing cross correlation between Shaily Engineering Plastics and JTL Industries, you can compare the effects of market volatilities on Shaily Engineering 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 Shaily Engineering with a short position of JTL Industries. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shaily Engineering and JTL Industries.

Diversification Opportunities for Shaily Engineering and JTL Industries

-0.57

Correlation Coefficient

Shaily Engineering  JTL Industries

Excellent diversification

The 3 months correlation between Shaily and JTL is -0.57. Overlapping area represents the amount of risk that can be diversified away by holding Shaily Engineering Plastics and JTL Industries in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on JTL Industries and Shaily Engineering 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 Shaily Engineering Plastics 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 Shaily Engineering i.e., Shaily Engineering and JTL Industries go up and down completely randomly.

Pair Corralation between Shaily Engineering and JTL Industries

Assuming the 90 days trading horizon Shaily Engineering Plastics is expected to generate 1.06 times more return on investment than JTL Industries. However, Shaily Engineering is 1.06 times more volatile than JTL Industries. It trades about 0.11 of its potential returns per unit of risk. JTL Industries is currently generating about -0.08 per unit of risk. If you would invest  147,045  in Shaily Engineering Plastics on December 24, 2024 and sell it today you would earn a total of  29,450  from holding Shaily Engineering Plastics or generate 20.03% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	98.39%
Values	Daily Returns

Shaily Engineering Plastics  vs.  JTL Industries

Shaily Engineering

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Shaily Engineering Plastics are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Despite somewhat unsteady forward indicators, Shaily Engineering sustained solid returns over the last few months and may actually be approaching a breakup point.

JTL Industries

Risk-Adjusted Performance

Very Weak

Over the last 90 days JTL Industries 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 forward 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 Shaily Engineering and JTL Industries

The main advantage of trading using opposite Shaily Engineering and JTL Industries positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shaily Engineering 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 Shaily Engineering Plastics 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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..