Correlation Between Fortis Healthcare and JBM Auto
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By analyzing existing cross correlation between Fortis Healthcare Limited and JBM Auto Limited, you can compare the effects of market volatilities on Fortis Healthcare and JBM Auto 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 Fortis Healthcare with a short position of JBM Auto. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fortis Healthcare and JBM Auto.
Diversification Opportunities for Fortis Healthcare and JBM Auto
0.67 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Fortis and JBM is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding Fortis Healthcare Limited and JBM Auto Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on JBM Auto Limited and Fortis Healthcare 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 Fortis Healthcare Limited are associated (or correlated) with JBM Auto. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of JBM Auto Limited has no effect on the direction of Fortis Healthcare i.e., Fortis Healthcare and JBM Auto go up and down completely randomly.
Pair Corralation between Fortis Healthcare and JBM Auto
Assuming the 90 days trading horizon Fortis Healthcare Limited is expected to generate 0.68 times more return on investment than JBM Auto. However, Fortis Healthcare Limited is 1.46 times less risky than JBM Auto. It trades about 0.08 of its potential returns per unit of risk. JBM Auto Limited is currently generating about -0.08 per unit of risk. If you would invest 45,841 in Fortis Healthcare Limited on November 28, 2024 and sell it today you would earn a total of 14,994 from holding Fortis Healthcare Limited or generate 32.71% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 98.92% |
| Values | Daily Returns |
Fortis Healthcare Limited vs. JBM Auto Limited
Performance |
| Timeline |
| Fortis Healthcare |
| JBM Auto Limited |
Fortis Healthcare and JBM Auto Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fortis Healthcare and JBM Auto
The main advantage of trading using opposite Fortis Healthcare and JBM Auto positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fortis Healthcare position performs unexpectedly, JBM Auto 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 JBM Auto will offset losses from the drop in JBM Auto's long position.The idea behind Fortis Healthcare Limited and JBM Auto Limited 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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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 Equity Valuation module to check real value of public entities based on technical and fundamental data.
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