Correlation Between POWERGRID Infrastructure and Jubilant Foodworks
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By analyzing existing cross correlation between POWERGRID Infrastructure Investment and Jubilant Foodworks Limited, you can compare the effects of market volatilities on POWERGRID Infrastructure and Jubilant Foodworks 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 POWERGRID Infrastructure with a short position of Jubilant Foodworks. Check out your portfolio center. Please also check ongoing floating volatility patterns of POWERGRID Infrastructure and Jubilant Foodworks.
Diversification Opportunities for POWERGRID Infrastructure and Jubilant Foodworks
-0.67 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between POWERGRID and Jubilant is -0.67. Overlapping area represents the amount of risk that can be diversified away by holding POWERGRID Infrastructure Inves and Jubilant Foodworks Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jubilant Foodworks and POWERGRID Infrastructure 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 POWERGRID Infrastructure Investment are associated (or correlated) with Jubilant Foodworks. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jubilant Foodworks has no effect on the direction of POWERGRID Infrastructure i.e., POWERGRID Infrastructure and Jubilant Foodworks go up and down completely randomly.
Pair Corralation between POWERGRID Infrastructure and Jubilant Foodworks
Assuming the 90 days trading horizon POWERGRID Infrastructure Investment is expected to under-perform the Jubilant Foodworks. But the stock apears to be less risky and, when comparing its historical volatility, POWERGRID Infrastructure Investment is 2.85 times less risky than Jubilant Foodworks. The stock trades about -0.11 of its potential returns per unit of risk. The Jubilant Foodworks Limited is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 48,106 in Jubilant Foodworks Limited on November 5, 2024 and sell it today you would earn a total of 22,284 from holding Jubilant Foodworks Limited or generate 46.32% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 99.18% |
| Values | Daily Returns |
POWERGRID Infrastructure Inves vs. Jubilant Foodworks Limited
Performance |
| Timeline |
| POWERGRID Infrastructure |
| Jubilant Foodworks |
POWERGRID Infrastructure and Jubilant Foodworks Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with POWERGRID Infrastructure and Jubilant Foodworks
The main advantage of trading using opposite POWERGRID Infrastructure and Jubilant Foodworks positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if POWERGRID Infrastructure position performs unexpectedly, Jubilant Foodworks 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 Jubilant Foodworks will offset losses from the drop in Jubilant Foodworks' long position.The idea behind POWERGRID Infrastructure Investment and Jubilant Foodworks 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 Transaction History module to view history of all your transactions and understand their impact on performance.
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