Correlation Between JS Investments and Thatta Cement
Can any of the company-specific risk be diversified away by investing in both JS Investments and Thatta Cement 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 JS Investments and Thatta Cement into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between JS Investments and Thatta Cement, you can compare the effects of market volatilities on JS Investments and Thatta Cement 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 JS Investments with a short position of Thatta Cement. Check out your portfolio center. Please also check ongoing floating volatility patterns of JS Investments and Thatta Cement.
Diversification Opportunities for JS Investments and Thatta Cement
0.82 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between JSIL and Thatta is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding JS Investments and Thatta Cement in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Thatta Cement and JS Investments 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 JS Investments are associated (or correlated) with Thatta Cement. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Thatta Cement has no effect on the direction of JS Investments i.e., JS Investments and Thatta Cement go up and down completely randomly.
Pair Corralation between JS Investments and Thatta Cement
Assuming the 90 days trading horizon JS Investments is expected to generate 3.07 times less return on investment than Thatta Cement. In addition to that, JS Investments is 1.1 times more volatile than Thatta Cement. It trades about 0.08 of its total potential returns per unit of risk. Thatta Cement is currently generating about 0.25 per unit of volatility. If you would invest 1,229 in Thatta Cement on September 12, 2024 and sell it today you would earn a total of 17,441 from holding Thatta Cement or generate 1419.12% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 75.39% |
| Values | Daily Returns |
JS Investments vs. Thatta Cement
Performance |
| Timeline |
| JS Investments |
| Thatta Cement |
JS Investments and Thatta Cement Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with JS Investments and Thatta Cement
The main advantage of trading using opposite JS Investments and Thatta Cement positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if JS Investments position performs unexpectedly, Thatta Cement 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 Thatta Cement will offset losses from the drop in Thatta Cement's long position.| JS Investments vs. Sardar Chemical Industries | JS Investments vs. Engro Polymer Chemicals | JS Investments vs. WorldCall Telecom | JS Investments vs. Pakistan Synthetics |
| Thatta Cement vs. United Insurance | Thatta Cement vs. JS Global Banking | Thatta Cement vs. Century Insurance | Thatta Cement vs. Shaheen Insurance |
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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
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