Correlation Between JBM Auto and Metalyst Forgings

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

Diversification Opportunities for JBM Auto and Metalyst Forgings

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  Correlation Coefficient

Pay attention - limited upside

The 3 months correlation between JBM and Metalyst is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding JBM Auto Limited and Metalyst Forgings Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Metalyst Forgings and JBM Auto 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 JBM Auto Limited are associated (or correlated) with Metalyst Forgings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Metalyst Forgings has no effect on the direction of JBM Auto i.e., JBM Auto and Metalyst Forgings go up and down completely randomly.

Pair Corralation between JBM Auto and Metalyst Forgings

If you would invest  146,900  in JBM Auto Limited on September 14, 2024 and sell it today you would earn a total of  23,815  from holding JBM Auto Limited or generate 16.21% return on investment over 90 days.
Time Period3 Months [change]
DirectionFlat 
StrengthInsignificant
Accuracy100.0%
ValuesDaily Returns

JBM Auto Limited  vs.  Metalyst Forgings Limited

 Performance 
       Timeline  
JBM Auto Limited 

Risk-Adjusted Performance

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Over the last 90 days JBM Auto Limited has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unsteady performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in January 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.
Metalyst Forgings 

Risk-Adjusted Performance

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Over the last 90 days Metalyst Forgings Limited has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy basic indicators, Metalyst Forgings is not utilizing all of its potentials. The newest stock price disarray, may contribute to short-term losses for the investors.

JBM Auto and Metalyst Forgings Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with JBM Auto and Metalyst Forgings

The main advantage of trading using opposite JBM Auto and Metalyst Forgings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if JBM Auto position performs unexpectedly, Metalyst Forgings 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 Metalyst Forgings will offset losses from the drop in Metalyst Forgings' long position.
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The idea behind JBM Auto Limited and Metalyst Forgings 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 CEOs Directory module to screen CEOs from public companies around the world.

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