Correlation Between Arpak International and JS Investments

Can any of the company-specific risk be diversified away by investing in both Arpak International and JS Investments 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 Arpak International and JS Investments into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Arpak International Investment and JS Investments, you can compare the effects of market volatilities on Arpak International and JS Investments 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 Arpak International with a short position of JS Investments. Check out your portfolio center. Please also check ongoing floating volatility patterns of Arpak International and JS Investments.

Diversification Opportunities for Arpak International and JS Investments

-0.3

Correlation Coefficient

Arpak International  JS Investments

Very good diversification

The 3 months correlation between Arpak and JSIL is -0.3. Overlapping area represents the amount of risk that can be diversified away by holding Arpak International Investment and JS Investments in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on JS Investments and Arpak International 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 Arpak International Investment are associated (or correlated) with JS Investments. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of JS Investments has no effect on the direction of Arpak International i.e., Arpak International and JS Investments go up and down completely randomly.

Pair Corralation between Arpak International and JS Investments

Assuming the 90 days trading horizon Arpak International is expected to generate 1.5 times less return on investment than JS Investments. In addition to that, Arpak International is 1.36 times more volatile than JS Investments. It trades about 0.09 of its total potential returns per unit of risk. JS Investments is currently generating about 0.18 per unit of volatility. If you would invest  2,125  in JS Investments on April 23, 2025 and sell it today you would earn a total of  676.00  from holding JS Investments or generate 31.81% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	77.78%
Values	Daily Returns

Arpak International Investment  vs.  JS Investments

Arpak International

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Arpak International Investment are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite quite weak basic indicators, Arpak International disclosed solid returns over the last few months and may actually be approaching a breakup point.

JS Investments

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in JS Investments are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, JS Investments sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Arpak International and JS Investments

The main advantage of trading using opposite Arpak International and JS Investments positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Arpak International position performs unexpectedly, JS Investments 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 JS Investments will offset losses from the drop in JS Investments' long position.

The idea behind Arpak International Investment and JS Investments 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.

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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.