Correlation Between Jubilant Foodworks and Aban Offshore
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By analyzing existing cross correlation between Jubilant Foodworks Limited and Aban Offshore Limited, you can compare the effects of market volatilities on Jubilant Foodworks and Aban Offshore 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 Jubilant Foodworks with a short position of Aban Offshore. Check out your portfolio center. Please also check ongoing floating volatility patterns of Jubilant Foodworks and Aban Offshore.
Diversification Opportunities for Jubilant Foodworks and Aban Offshore
-0.17 | Correlation Coefficient |
Good diversification
The 3 months correlation between Jubilant and Aban is -0.17. Overlapping area represents the amount of risk that can be diversified away by holding Jubilant Foodworks Limited and Aban Offshore Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aban Offshore Limited and Jubilant Foodworks 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 Jubilant Foodworks Limited are associated (or correlated) with Aban Offshore. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aban Offshore Limited has no effect on the direction of Jubilant Foodworks i.e., Jubilant Foodworks and Aban Offshore go up and down completely randomly.
Pair Corralation between Jubilant Foodworks and Aban Offshore
Assuming the 90 days trading horizon Jubilant Foodworks Limited is expected to generate 1.02 times more return on investment than Aban Offshore. However, Jubilant Foodworks is 1.02 times more volatile than Aban Offshore Limited. It trades about 0.2 of its potential returns per unit of risk. Aban Offshore Limited is currently generating about -0.36 per unit of risk. If you would invest 69,470 in Jubilant Foodworks Limited on October 10, 2024 and sell it today you would earn a total of 5,570 from holding Jubilant Foodworks Limited or generate 8.02% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.45% |
| Values | Daily Returns |
Jubilant Foodworks Limited vs. Aban Offshore Limited
Performance |
| Timeline |
| Jubilant Foodworks |
| Aban Offshore Limited |
Jubilant Foodworks and Aban Offshore Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Jubilant Foodworks and Aban Offshore
The main advantage of trading using opposite Jubilant Foodworks and Aban Offshore positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Jubilant Foodworks position performs unexpectedly, Aban Offshore 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 Aban Offshore will offset losses from the drop in Aban Offshore's long position.The idea behind Jubilant Foodworks Limited and Aban Offshore 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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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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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