Correlation Between SIA Engineering and Jerash Holdings
Can any of the company-specific risk be diversified away by investing in both SIA Engineering and Jerash Holdings 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 SIA Engineering and Jerash Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SIA Engineering and Jerash Holdings, you can compare the effects of market volatilities on SIA Engineering and Jerash Holdings 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 SIA Engineering with a short position of Jerash Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of SIA Engineering and Jerash Holdings.
Diversification Opportunities for SIA Engineering and Jerash Holdings
0.48 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between SIA and Jerash is 0.48. Overlapping area represents the amount of risk that can be diversified away by holding SIA Engineering and Jerash Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jerash Holdings and SIA Engineering 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 SIA Engineering are associated (or correlated) with Jerash Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jerash Holdings has no effect on the direction of SIA Engineering i.e., SIA Engineering and Jerash Holdings go up and down completely randomly.
Pair Corralation between SIA Engineering and Jerash Holdings
Assuming the 90 days horizon SIA Engineering is expected to generate 6.49 times less return on investment than Jerash Holdings. But when comparing it to its historical volatility, SIA Engineering is 8.84 times less risky than Jerash Holdings. It trades about 0.08 of its potential returns per unit of risk. Jerash Holdings is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 287.00 in Jerash Holdings on November 3, 2024 and sell it today you would earn a total of 61.50 from holding Jerash Holdings or generate 21.43% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 98.41% |
| Values | Daily Returns |
SIA Engineering vs. Jerash Holdings
Performance |
| Timeline |
| SIA Engineering |
| Jerash Holdings |
SIA Engineering and Jerash Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SIA Engineering and Jerash Holdings
The main advantage of trading using opposite SIA Engineering and Jerash Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SIA Engineering position performs unexpectedly, Jerash Holdings 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 Jerash Holdings will offset losses from the drop in Jerash Holdings' long position.| SIA Engineering vs. Grupo Aeroportuario del | SIA Engineering vs. Grupo Aeroportuario del | SIA Engineering vs. Grupo Aeroportuario del | SIA Engineering vs. AerSale Corp |
| Jerash Holdings vs. Vince Holding Corp | Jerash Holdings vs. Oxford Industries | Jerash Holdings vs. Gildan Activewear | Jerash Holdings vs. Columbia Sportswear |
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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
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