Correlation Between JB Chemicals and Federal Bank
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By analyzing existing cross correlation between JB Chemicals Pharmaceuticals and The Federal Bank, you can compare the effects of market volatilities on JB Chemicals and Federal Bank 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 JB Chemicals with a short position of Federal Bank. Check out your portfolio center. Please also check ongoing floating volatility patterns of JB Chemicals and Federal Bank.
Diversification Opportunities for JB Chemicals and Federal Bank
-0.35 | Correlation Coefficient |
Very good diversification
The 3 months correlation between JBCHEPHARM and Federal is -0.35. Overlapping area represents the amount of risk that can be diversified away by holding JB Chemicals Pharmaceuticals and The Federal Bank in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Federal Bank and JB 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 JB Chemicals Pharmaceuticals are associated (or correlated) with Federal Bank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Federal Bank has no effect on the direction of JB Chemicals i.e., JB Chemicals and Federal Bank go up and down completely randomly.
Pair Corralation between JB Chemicals and Federal Bank
Assuming the 90 days trading horizon JB Chemicals Pharmaceuticals is expected to generate 4.75 times more return on investment than Federal Bank. However, JB Chemicals is 4.75 times more volatile than The Federal Bank. It trades about 0.05 of its potential returns per unit of risk. The Federal Bank is currently generating about 0.06 per unit of risk. If you would invest 97,896 in JB Chemicals Pharmaceuticals on September 25, 2024 and sell it today you would earn a total of 88,074 from holding JB Chemicals Pharmaceuticals or generate 89.97% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
JB Chemicals Pharmaceuticals vs. The Federal Bank
Performance |
| Timeline |
| JB Chemicals Pharmac |
| Federal Bank |
JB Chemicals and Federal Bank Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with JB Chemicals and Federal Bank
The main advantage of trading using opposite JB Chemicals and Federal Bank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if JB Chemicals position performs unexpectedly, Federal Bank 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 Federal Bank will offset losses from the drop in Federal Bank's long position.| JB Chemicals vs. Gujarat Lease Financing | JB Chemicals vs. GPT Healthcare | JB Chemicals vs. Zydus Wellness Limited | JB Chemicals vs. Yatharth Hospital Trauma |
| Federal Bank vs. Kingfa Science Technology | Federal Bank vs. Rico Auto Industries | Federal Bank vs. GACM Technologies Limited | Federal Bank vs. COSMO FIRST LIMITED |
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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