Correlation Between JGCHEMICALS and Robust Hotels

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

By analyzing existing cross correlation between JGCHEMICALS LIMITED and Robust Hotels Limited, you can compare the effects of market volatilities on JGCHEMICALS and Robust Hotels 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 Robust Hotels. Check out your portfolio center. Please also check ongoing floating volatility patterns of JGCHEMICALS and Robust Hotels.

Diversification Opportunities for JGCHEMICALS and Robust Hotels

0.86

Correlation Coefficient

JGCHEMICALS  Robust Hotels

Very poor diversification

The 3 months correlation between JGCHEMICALS and Robust is 0.86. Overlapping area represents the amount of risk that can be diversified away by holding JGCHEMICALS LIMITED and Robust Hotels Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Robust Hotels Limited 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 Robust Hotels. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Robust Hotels Limited has no effect on the direction of JGCHEMICALS i.e., JGCHEMICALS and Robust Hotels go up and down completely randomly.

Pair Corralation between JGCHEMICALS and Robust Hotels

Assuming the 90 days trading horizon JGCHEMICALS LIMITED is expected to generate 1.35 times more return on investment than Robust Hotels. However, JGCHEMICALS is 1.35 times more volatile than Robust Hotels Limited. It trades about 0.17 of its potential returns per unit of risk. Robust Hotels Limited is currently generating about 0.18 per unit of risk. If you would invest  36,070  in JGCHEMICALS LIMITED on April 24, 2025 and sell it today you would earn a total of  14,020  from holding JGCHEMICALS LIMITED or generate 38.87% return on investment over 90 days.

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

JGCHEMICALS LIMITED  vs.  Robust Hotels Limited

JGCHEMICALS LIMITED

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in JGCHEMICALS LIMITED are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak technical indicators, JGCHEMICALS sustained solid returns over the last few months and may actually be approaching a breakup point.

Robust Hotels Limited

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Robust Hotels Limited are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. In spite of rather inconsistent technical and fundamental indicators, Robust Hotels exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with JGCHEMICALS and Robust Hotels

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

The idea behind JGCHEMICALS LIMITED and Robust Hotels 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.

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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.