Correlation Between TECIL Chemicals and JB Chemicals

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

By analyzing existing cross correlation between TECIL Chemicals and and JB Chemicals Pharmaceuticals, you can compare the effects of market volatilities on TECIL Chemicals and JB Chemicals 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 TECIL Chemicals with a short position of JB Chemicals. Check out your portfolio center. Please also check ongoing floating volatility patterns of TECIL Chemicals and JB Chemicals.

Diversification Opportunities for TECIL Chemicals and JB Chemicals

-0.45

Correlation Coefficient

TECIL Chemicals  JB Chemicals

Very good diversification

The 3 months correlation between TECIL and JBCHEPHARM is -0.45. Overlapping area represents the amount of risk that can be diversified away by holding TECIL Chemicals and and JB Chemicals Pharmaceuticals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on JB Chemicals Pharmac and TECIL Chemicals 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 TECIL Chemicals and are associated (or correlated) with JB Chemicals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of JB Chemicals Pharmac has no effect on the direction of TECIL Chemicals i.e., TECIL Chemicals and JB Chemicals go up and down completely randomly.

Pair Corralation between TECIL Chemicals and JB Chemicals

Assuming the 90 days trading horizon TECIL Chemicals and is expected to generate 1.84 times more return on investment than JB Chemicals. However, TECIL Chemicals is 1.84 times more volatile than JB Chemicals Pharmaceuticals. It trades about 0.04 of its potential returns per unit of risk. JB Chemicals Pharmaceuticals is currently generating about 0.02 per unit of risk. If you would invest  2,210  in TECIL Chemicals and on October 12, 2024 and sell it today you would earn a total of  349.00  from holding TECIL Chemicals and or generate 15.79% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	98.37%
Values	Daily Returns

TECIL Chemicals and  vs.  JB Chemicals Pharmaceuticals

TECIL Chemicals

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days TECIL Chemicals and has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fairly strong technical indicators, TECIL Chemicals is not utilizing all of its potentials. The latest stock price confusion, may contribute to short-horizon losses for the traders.

JB Chemicals Pharmac

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in JB Chemicals Pharmaceuticals are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite fairly strong basic indicators, JB Chemicals is not utilizing all of its potentials. The newest stock price confusion, may contribute to short-horizon losses for the traders.

Pair Trading with TECIL Chemicals and JB Chemicals

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

The idea behind TECIL Chemicals and and JB Chemicals Pharmaceuticals 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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.