Correlation Between Network18 Media and JBM Auto
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By analyzing existing cross correlation between Network18 Media Investments and JBM Auto Limited, you can compare the effects of market volatilities on Network18 Media and JBM Auto 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 Network18 Media with a short position of JBM Auto. Check out your portfolio center. Please also check ongoing floating volatility patterns of Network18 Media and JBM Auto.
Diversification Opportunities for Network18 Media and JBM Auto
0.44 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Network18 and JBM is 0.44. Overlapping area represents the amount of risk that can be diversified away by holding Network18 Media Investments and JBM Auto Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on JBM Auto Limited and Network18 Media 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 Network18 Media Investments are associated (or correlated) with JBM Auto. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of JBM Auto Limited has no effect on the direction of Network18 Media i.e., Network18 Media and JBM Auto go up and down completely randomly.
Pair Corralation between Network18 Media and JBM Auto
Assuming the 90 days trading horizon Network18 Media Investments is expected to under-perform the JBM Auto. In addition to that, Network18 Media is 1.03 times more volatile than JBM Auto Limited. It trades about -0.06 of its total potential returns per unit of risk. JBM Auto Limited is currently generating about 0.27 per unit of volatility. If you would invest 154,600 in JBM Auto Limited on September 12, 2024 and sell it today you would earn a total of 22,395 from holding JBM Auto Limited or generate 14.49% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
Network18 Media Investments vs. JBM Auto Limited
Performance |
| Timeline |
| Network18 Media Inve |
| JBM Auto Limited |
Network18 Media and JBM Auto Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Network18 Media and JBM Auto
The main advantage of trading using opposite Network18 Media and JBM Auto positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Network18 Media position performs unexpectedly, JBM Auto 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 JBM Auto will offset losses from the drop in JBM Auto's long position.The idea behind Network18 Media Investments and JBM Auto 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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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