Correlation Between JTL Industries and Arrow Greentech

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

Diversification Opportunities for JTL Industries and Arrow Greentech

-0.43
  Correlation Coefficient

Very good diversification

The 3 months correlation between JTL and Arrow is -0.43. Overlapping area represents the amount of risk that can be diversified away by holding JTL Industries and Arrow Greentech Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Arrow Greentech and JTL Industries 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 JTL Industries are associated (or correlated) with Arrow Greentech. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Arrow Greentech has no effect on the direction of JTL Industries i.e., JTL Industries and Arrow Greentech go up and down completely randomly.

Pair Corralation between JTL Industries and Arrow Greentech

Assuming the 90 days trading horizon JTL Industries is expected to under-perform the Arrow Greentech. In addition to that, JTL Industries is 2.38 times more volatile than Arrow Greentech Limited. It trades about -0.2 of its total potential returns per unit of risk. Arrow Greentech Limited is currently generating about 0.04 per unit of volatility. If you would invest  82,340  in Arrow Greentech Limited on September 3, 2024 and sell it today you would earn a total of  1,460  from holding Arrow Greentech Limited or generate 1.77% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthVery Weak
Accuracy100.0%
ValuesDaily Returns

JTL Industries  vs.  Arrow Greentech Limited

 Performance 
       Timeline  
JTL Industries 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days JTL Industries has generated negative risk-adjusted returns adding no value to investors with long positions. Despite uncertain performance in the last few months, the Stock's forward indicators remain somewhat strong which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long term up-swing for the company investors.
Arrow Greentech 

Risk-Adjusted Performance

1 of 100

 
Weak
 
Strong
Weak
Compared to the overall equity markets, risk-adjusted returns on investments in Arrow Greentech Limited are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Even with relatively invariable technical and fundamental indicators, Arrow Greentech is not utilizing all of its potentials. The newest stock price agitation, may contribute to short-term losses for the retail investors.

JTL Industries and Arrow Greentech Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with JTL Industries and Arrow Greentech

The main advantage of trading using opposite JTL Industries and Arrow Greentech positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if JTL Industries position performs unexpectedly, Arrow Greentech 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 Arrow Greentech will offset losses from the drop in Arrow Greentech's long position.
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The idea behind JTL Industries and Arrow Greentech 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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.

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