Correlation Between JTL Industries and Jayant Agro

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

Diversification Opportunities for JTL Industries and Jayant Agro

0.63
  Correlation Coefficient

Poor diversification

The 3 months correlation between JTL and Jayant is 0.63. Overlapping area represents the amount of risk that can be diversified away by holding JTL Industries and Jayant Agro Organics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jayant Agro Organics 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 Jayant Agro. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jayant Agro Organics has no effect on the direction of JTL Industries i.e., JTL Industries and Jayant Agro go up and down completely randomly.

Pair Corralation between JTL Industries and Jayant Agro

Assuming the 90 days trading horizon JTL Industries is expected to under-perform the Jayant Agro. In addition to that, JTL Industries is 1.38 times more volatile than Jayant Agro Organics. It trades about -0.01 of its total potential returns per unit of risk. Jayant Agro Organics is currently generating about 0.06 per unit of volatility. If you would invest  16,908  in Jayant Agro Organics on September 4, 2024 and sell it today you would earn a total of  12,027  from holding Jayant Agro Organics or generate 71.13% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthSignificant
Accuracy99.79%
ValuesDaily Returns

JTL Industries  vs.  Jayant Agro Organics

 Performance 
       Timeline  
JTL Industries 

Risk-Adjusted Performance

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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.
Jayant Agro Organics 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days Jayant Agro Organics has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy basic indicators, Jayant Agro is not utilizing all of its potentials. The newest stock price disarray, may contribute to short-term losses for the investors.

JTL Industries and Jayant Agro Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with JTL Industries and Jayant Agro

The main advantage of trading using opposite JTL Industries and Jayant Agro positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if JTL Industries position performs unexpectedly, Jayant Agro 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 Jayant Agro will offset losses from the drop in Jayant Agro's long position.
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The idea behind JTL Industries and Jayant Agro Organics 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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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 Money Managers module to screen money managers from public funds and ETFs managed around the world.

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