Correlation Between JBM Auto and Pritish Nandy
Can any of the company-specific risk be diversified away by investing in both JBM Auto and Pritish Nandy 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 Pritish Nandy 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 Pritish Nandy Communications, you can compare the effects of market volatilities on JBM Auto and Pritish Nandy 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 Pritish Nandy. Check out your portfolio center. Please also check ongoing floating volatility patterns of JBM Auto and Pritish Nandy.
Diversification Opportunities for JBM Auto and Pritish Nandy
0.74 | Correlation Coefficient |
Poor diversification
The 3 months correlation between JBM and Pritish is 0.74. Overlapping area represents the amount of risk that can be diversified away by holding JBM Auto Limited and Pritish Nandy Communications in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pritish Nandy Commun 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 Pritish Nandy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pritish Nandy Commun has no effect on the direction of JBM Auto i.e., JBM Auto and Pritish Nandy go up and down completely randomly.
Pair Corralation between JBM Auto and Pritish Nandy
Assuming the 90 days trading horizon JBM Auto Limited is expected to generate 0.86 times more return on investment than Pritish Nandy. However, JBM Auto Limited is 1.17 times less risky than Pritish Nandy. It trades about -0.05 of its potential returns per unit of risk. Pritish Nandy Communications is currently generating about -0.07 per unit of risk. If you would invest 94,552 in JBM Auto Limited on December 2, 2024 and sell it today you would lose (34,052) from holding JBM Auto Limited or give up 36.01% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 97.94% |
| Values | Daily Returns |
JBM Auto Limited vs. Pritish Nandy Communications
Performance |
| Timeline |
| JBM Auto Limited |
| Pritish Nandy Commun |
JBM Auto and Pritish Nandy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with JBM Auto and Pritish Nandy
The main advantage of trading using opposite JBM Auto and Pritish Nandy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if JBM Auto position performs unexpectedly, Pritish Nandy 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 Pritish Nandy will offset losses from the drop in Pritish Nandy's long position.| JBM Auto vs. Asian Hotels Limited | JBM Auto vs. Tree House Education | JBM Auto vs. Lemon Tree Hotels | JBM Auto vs. Kamat Hotels Limited |
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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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
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