Correlation Between JB Chemicals and Gangotri Textiles

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Can any of the company-specific risk be diversified away by investing in both JB Chemicals and Gangotri Textiles 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 JB Chemicals and Gangotri Textiles into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between JB Chemicals Pharmaceuticals and Gangotri Textiles Limited, you can compare the effects of market volatilities on JB Chemicals and Gangotri Textiles 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 Gangotri Textiles. Check out your portfolio center. Please also check ongoing floating volatility patterns of JB Chemicals and Gangotri Textiles.

Diversification Opportunities for JB Chemicals and Gangotri Textiles

JBCHEPHARMGangotriDiversified AwayJBCHEPHARMGangotriDiversified Away100%
0.75
  Correlation Coefficient

Poor diversification

The 3 months correlation between JBCHEPHARM and Gangotri is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding JB Chemicals Pharmaceuticals and Gangotri Textiles Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gangotri Textiles 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 Gangotri Textiles. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gangotri Textiles has no effect on the direction of JB Chemicals i.e., JB Chemicals and Gangotri Textiles go up and down completely randomly.

Pair Corralation between JB Chemicals and Gangotri Textiles

Assuming the 90 days trading horizon JB Chemicals Pharmaceuticals is expected to generate 1.0 times more return on investment than Gangotri Textiles. However, JB Chemicals Pharmaceuticals is 1.0 times less risky than Gangotri Textiles. It trades about 0.06 of its potential returns per unit of risk. Gangotri Textiles Limited is currently generating about 0.0 per unit of risk. If you would invest  95,338  in JB Chemicals Pharmaceuticals on November 30, 2024 and sell it today you would earn a total of  62,442  from holding JB Chemicals Pharmaceuticals or generate 65.5% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthSignificant
Accuracy99.79%
ValuesDaily Returns

JB Chemicals Pharmaceuticals  vs.  Gangotri Textiles Limited

 Performance 
JavaScript chart by amCharts 3.21.15Dec2025Feb -15-10-50510
JavaScript chart by amCharts 3.21.15JBCHEPHARM GANGOTRI
       Timeline  
JB Chemicals Pharmac 

Risk-Adjusted Performance

Very Weak

 
Weak
 
Strong
Over the last 90 days JB Chemicals Pharmaceuticals has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest weak performance, the Stock's basic indicators remain strong and the recent confusion on Wall Street may also be a sign of long-lasting gains for the firm traders.
JavaScript chart by amCharts 3.21.15JanFebFeb1,5501,6001,6501,7001,7501,8001,8501,9001,950
Gangotri Textiles 

Risk-Adjusted Performance

Very Weak

 
Weak
 
Strong
Over the last 90 days Gangotri Textiles Limited has generated negative risk-adjusted returns adding no value to investors with long positions. Even with uncertain performance in the last few months, the Stock's basic indicators remain relatively invariable which may send shares a bit higher in March 2025. The latest agitation may also be a sign of long-running up-swing for the enterprise retail investors.
JavaScript chart by amCharts 3.21.15JanFebFeb11.051.11.151.2

JB Chemicals and Gangotri Textiles Volatility Contrast

   Predicted Return Density   
JavaScript chart by amCharts 3.21.15-2.97-2.22-1.48-0.730.00.691.392.092.79 0.070.080.090.100.110.120.13
JavaScript chart by amCharts 3.21.15JBCHEPHARM GANGOTRI
       Returns  

Pair Trading with JB Chemicals and Gangotri Textiles

The main advantage of trading using opposite JB Chemicals and Gangotri Textiles positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if JB Chemicals position performs unexpectedly, Gangotri Textiles 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 Gangotri Textiles will offset losses from the drop in Gangotri Textiles' long position.
The idea behind JB Chemicals Pharmaceuticals and Gangotri Textiles 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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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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.

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