Correlation Between JGCHEMICALS and Rajshree Sugars

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

By analyzing existing cross correlation between JGCHEMICALS LIMITED and Rajshree Sugars Chemicals, you can compare the effects of market volatilities on JGCHEMICALS and Rajshree Sugars 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 JGCHEMICALS with a short position of Rajshree Sugars. Check out your portfolio center. Please also check ongoing floating volatility patterns of JGCHEMICALS and Rajshree Sugars.

Diversification Opportunities for JGCHEMICALS and Rajshree Sugars

0.26

Correlation Coefficient

JGCHEMICALS  Rajshree Sugars

Modest diversification

The 3 months correlation between JGCHEMICALS and Rajshree is 0.26. Overlapping area represents the amount of risk that can be diversified away by holding JGCHEMICALS LIMITED and Rajshree Sugars Chemicals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Rajshree Sugars Chemicals and JGCHEMICALS 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 JGCHEMICALS LIMITED are associated (or correlated) with Rajshree Sugars. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Rajshree Sugars Chemicals has no effect on the direction of JGCHEMICALS i.e., JGCHEMICALS and Rajshree Sugars go up and down completely randomly.

Pair Corralation between JGCHEMICALS and Rajshree Sugars

Assuming the 90 days trading horizon JGCHEMICALS LIMITED is expected to generate 1.49 times more return on investment than Rajshree Sugars. However, JGCHEMICALS is 1.49 times more volatile than Rajshree Sugars Chemicals. It trades about 0.18 of its potential returns per unit of risk. Rajshree Sugars Chemicals is currently generating about -0.01 per unit of risk. If you would invest  35,515  in JGCHEMICALS LIMITED on April 20, 2025 and sell it today you would earn a total of  15,395  from holding JGCHEMICALS LIMITED or generate 43.35% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

JGCHEMICALS LIMITED  vs.  Rajshree Sugars Chemicals

JGCHEMICALS LIMITED

Risk-Adjusted Performance

Good

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

Rajshree Sugars Chemicals

Risk-Adjusted Performance

Very Weak

Over the last 90 days Rajshree Sugars Chemicals has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound basic indicators, Rajshree Sugars is not utilizing all of its potentials. The latest stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with JGCHEMICALS and Rajshree Sugars

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

The idea behind JGCHEMICALS LIMITED and Rajshree Sugars Chemicals 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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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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.