Correlation Between JM Financial and Centum Electronics
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By analyzing existing cross correlation between JM Financial Limited and Centum Electronics Limited, you can compare the effects of market volatilities on JM Financial and Centum Electronics 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 JM Financial with a short position of Centum Electronics. Check out your portfolio center. Please also check ongoing floating volatility patterns of JM Financial and Centum Electronics.
Diversification Opportunities for JM Financial and Centum Electronics
0.43 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between JMFINANCIL and Centum is 0.43. Overlapping area represents the amount of risk that can be diversified away by holding JM Financial Limited and Centum Electronics Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Centum Electronics and JM Financial 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 JM Financial Limited are associated (or correlated) with Centum Electronics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Centum Electronics has no effect on the direction of JM Financial i.e., JM Financial and Centum Electronics go up and down completely randomly.
Pair Corralation between JM Financial and Centum Electronics
Assuming the 90 days trading horizon JM Financial Limited is expected to generate 0.96 times more return on investment than Centum Electronics. However, JM Financial Limited is 1.04 times less risky than Centum Electronics. It trades about 0.07 of its potential returns per unit of risk. Centum Electronics Limited is currently generating about 0.03 per unit of risk. If you would invest 7,864 in JM Financial Limited on September 12, 2024 and sell it today you would earn a total of 6,177 from holding JM Financial Limited or generate 78.55% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
JM Financial Limited vs. Centum Electronics Limited
Performance |
| Timeline |
| JM Financial Limited |
| Centum Electronics |
JM Financial and Centum Electronics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with JM Financial and Centum Electronics
The main advantage of trading using opposite JM Financial and Centum Electronics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if JM Financial position performs unexpectedly, Centum Electronics 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 Centum Electronics will offset losses from the drop in Centum Electronics' long position.| JM Financial vs. Yes Bank Limited | JM Financial vs. Indian Oil | JM Financial vs. Indo Borax Chemicals | JM Financial vs. Kingfa Science Technology |
| Centum Electronics vs. Reliance Industries Limited | Centum Electronics vs. Oil Natural Gas | Centum Electronics vs. Indian Oil | Centum Electronics vs. HDFC Bank 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 CEOs Directory module to screen CEOs from public companies around the world.
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