Correlation Between Jay Mart and NSL Foods
Can any of the company-specific risk be diversified away by investing in both Jay Mart and NSL Foods 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 Jay Mart and NSL Foods into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Jay Mart Public and NSL Foods Public, you can compare the effects of market volatilities on Jay Mart and NSL Foods 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 Jay Mart with a short position of NSL Foods. Check out your portfolio center. Please also check ongoing floating volatility patterns of Jay Mart and NSL Foods.
Diversification Opportunities for Jay Mart and NSL Foods
Average diversification
The 3 months correlation between Jay and NSL is 0.11. Overlapping area represents the amount of risk that can be diversified away by holding Jay Mart Public and NSL Foods Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NSL Foods Public and Jay Mart 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 Jay Mart Public are associated (or correlated) with NSL Foods. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NSL Foods Public has no effect on the direction of Jay Mart i.e., Jay Mart and NSL Foods go up and down completely randomly.
Pair Corralation between Jay Mart and NSL Foods
Assuming the 90 days trading horizon Jay Mart Public is expected to under-perform the NSL Foods. In addition to that, Jay Mart is 1.32 times more volatile than NSL Foods Public. It trades about -0.14 of its total potential returns per unit of risk. NSL Foods Public is currently generating about -0.06 per unit of volatility. If you would invest 3,475 in NSL Foods Public on August 30, 2024 and sell it today you would lose (200.00) from holding NSL Foods Public or give up 5.76% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Jay Mart Public vs. NSL Foods Public
Performance |
| Timeline |
| Jay Mart Public |
| NSL Foods Public |
Jay Mart and NSL Foods Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Jay Mart and NSL Foods
The main advantage of trading using opposite Jay Mart and NSL Foods positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Jay Mart position performs unexpectedly, NSL Foods 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 NSL Foods will offset losses from the drop in NSL Foods' long position.| Jay Mart vs. AP Public | Jay Mart vs. Jasmine International Public | Jay Mart vs. Asia Plus Group | Jay Mart vs. Bangchak Public |
| NSL Foods vs. Carabao Group Public | NSL Foods vs. Jay Mart Public | NSL Foods vs. Gulf Energy Development | NSL Foods vs. KCE Electronics Public |
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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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