Correlation Between Jai Balaji and AGI Greenpac

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Can any of the company-specific risk be diversified away by investing in both Jai Balaji and AGI Greenpac 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 Jai Balaji and AGI Greenpac into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Jai Balaji Industries and AGI Greenpac Limited, you can compare the effects of market volatilities on Jai Balaji and AGI Greenpac 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 Jai Balaji with a short position of AGI Greenpac. Check out your portfolio center. Please also check ongoing floating volatility patterns of Jai Balaji and AGI Greenpac.

Diversification Opportunities for Jai Balaji and AGI Greenpac

-0.23
  Correlation Coefficient

Very good diversification

The 3 months correlation between Jai and AGI is -0.23. Overlapping area represents the amount of risk that can be diversified away by holding Jai Balaji Industries and AGI Greenpac Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AGI Greenpac Limited and Jai Balaji 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 Jai Balaji Industries are associated (or correlated) with AGI Greenpac. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AGI Greenpac Limited has no effect on the direction of Jai Balaji i.e., Jai Balaji and AGI Greenpac go up and down completely randomly.

Pair Corralation between Jai Balaji and AGI Greenpac

Assuming the 90 days trading horizon Jai Balaji Industries is expected to generate 0.46 times more return on investment than AGI Greenpac. However, Jai Balaji Industries is 2.16 times less risky than AGI Greenpac. It trades about -0.41 of its potential returns per unit of risk. AGI Greenpac Limited is currently generating about -0.22 per unit of risk. If you would invest  97,460  in Jai Balaji Industries on October 11, 2024 and sell it today you would lose (13,835) from holding Jai Balaji Industries or give up 14.2% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthInsignificant
Accuracy100.0%
ValuesDaily Returns

Jai Balaji Industries  vs.  AGI Greenpac Limited

 Performance 
       Timeline  
Jai Balaji Industries 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days Jai Balaji Industries has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's basic indicators remain somewhat strong which may send shares a bit higher in February 2025. The current disturbance may also be a sign of long term up-swing for the company investors.
AGI Greenpac Limited 

Risk-Adjusted Performance

1 of 100

 
Weak
 
Strong
Weak
Compared to the overall equity markets, risk-adjusted returns on investments in AGI Greenpac Limited are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of rather sound technical and fundamental indicators, AGI Greenpac is not utilizing all of its potentials. The newest stock price tumult, may contribute to shorter-term losses for the shareholders.

Jai Balaji and AGI Greenpac Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Jai Balaji and AGI Greenpac

The main advantage of trading using opposite Jai Balaji and AGI Greenpac positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Jai Balaji position performs unexpectedly, AGI Greenpac 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 AGI Greenpac will offset losses from the drop in AGI Greenpac's long position.
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The idea behind Jai Balaji Industries and AGI Greenpac 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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.

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