Correlation Between Jayant Agro and Muthoot Finance
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By analyzing existing cross correlation between Jayant Agro Organics and Muthoot Finance Limited, you can compare the effects of market volatilities on Jayant Agro and Muthoot Finance 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 Jayant Agro with a short position of Muthoot Finance. Check out your portfolio center. Please also check ongoing floating volatility patterns of Jayant Agro and Muthoot Finance.
Diversification Opportunities for Jayant Agro and Muthoot Finance
0.6 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Jayant and Muthoot is 0.6. Overlapping area represents the amount of risk that can be diversified away by holding Jayant Agro Organics and Muthoot Finance Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Muthoot Finance and Jayant Agro 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 Jayant Agro Organics are associated (or correlated) with Muthoot Finance. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Muthoot Finance has no effect on the direction of Jayant Agro i.e., Jayant Agro and Muthoot Finance go up and down completely randomly.
Pair Corralation between Jayant Agro and Muthoot Finance
Assuming the 90 days trading horizon Jayant Agro Organics is expected to generate 1.11 times more return on investment than Muthoot Finance. However, Jayant Agro is 1.11 times more volatile than Muthoot Finance Limited. It trades about 0.09 of its potential returns per unit of risk. Muthoot Finance Limited is currently generating about 0.06 per unit of risk. If you would invest 28,280 in Jayant Agro Organics on September 4, 2024 and sell it today you would earn a total of 995.00 from holding Jayant Agro Organics or generate 3.52% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.24% |
| Values | Daily Returns |
Jayant Agro Organics vs. Muthoot Finance Limited
Performance |
| Timeline |
| Jayant Agro Organics |
| Muthoot Finance |
Jayant Agro and Muthoot Finance Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Jayant Agro and Muthoot Finance
The main advantage of trading using opposite Jayant Agro and Muthoot Finance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Jayant Agro position performs unexpectedly, Muthoot Finance 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 Muthoot Finance will offset losses from the drop in Muthoot Finance's long position.| Jayant Agro vs. NMDC Limited | Jayant Agro vs. Steel Authority of | Jayant Agro vs. Embassy Office Parks | Jayant Agro vs. Gujarat Narmada Valley |
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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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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