Correlation Between Baazar Style and JTL Industries

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

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

Diversification Opportunities for Baazar Style and JTL Industries

0.14

Correlation Coefficient

Baazar Style  JTL Industries

Average diversification

The 3 months correlation between Baazar and JTL is 0.14. Overlapping area represents the amount of risk that can be diversified away by holding Baazar Style Retail and JTL Industries in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on JTL Industries and Baazar Style 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 Baazar Style Retail 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 Baazar Style i.e., Baazar Style and JTL Industries go up and down completely randomly.

Pair Corralation between Baazar Style and JTL Industries

Assuming the 90 days trading horizon Baazar Style Retail is expected to under-perform the JTL Industries. In addition to that, Baazar Style is 1.07 times more volatile than JTL Industries. It trades about -0.02 of its total potential returns per unit of risk. JTL Industries is currently generating about 0.07 per unit of volatility. If you would invest  9,763  in JTL Industries on October 24, 2024 and sell it today you would earn a total of  944.00  from holding JTL Industries or generate 9.67% return on investment over 90 days.

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

Baazar Style Retail  vs.  JTL Industries

Baazar Style Retail

Risk-Adjusted Performance

0 of 100

Very Weak

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

JTL Industries

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in JTL Industries are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite somewhat unfluctuating forward indicators, JTL Industries may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Pair Trading with Baazar Style and JTL Industries

The main advantage of trading using opposite Baazar Style and JTL Industries positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Baazar Style 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 Baazar Style Retail 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.

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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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.