Correlation Between Jindal Steel and LLOYDS METALS

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

By analyzing existing cross correlation between Jindal Steel Power and LLOYDS METALS AND, you can compare the effects of market volatilities on Jindal Steel and LLOYDS METALS 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 Jindal Steel with a short position of LLOYDS METALS. Check out your portfolio center. Please also check ongoing floating volatility patterns of Jindal Steel and LLOYDS METALS.

Diversification Opportunities for Jindal Steel and LLOYDS METALS

0.51

Correlation Coefficient

Jindal Steel  LLOYDS METALS

Very weak diversification

The 3 months correlation between Jindal and LLOYDS is 0.51. Overlapping area represents the amount of risk that can be diversified away by holding Jindal Steel Power and LLOYDS METALS AND in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on LLOYDS METALS AND and Jindal Steel 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 Jindal Steel Power are associated (or correlated) with LLOYDS METALS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of LLOYDS METALS AND has no effect on the direction of Jindal Steel i.e., Jindal Steel and LLOYDS METALS go up and down completely randomly.

Pair Corralation between Jindal Steel and LLOYDS METALS

Assuming the 90 days trading horizon Jindal Steel is expected to generate 2.36 times less return on investment than LLOYDS METALS. But when comparing it to its historical volatility, Jindal Steel Power is 1.38 times less risky than LLOYDS METALS. It trades about 0.05 of its potential returns per unit of risk. LLOYDS METALS AND is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest  131,871  in LLOYDS METALS AND on April 22, 2025 and sell it today you would earn a total of  15,389  from holding LLOYDS METALS AND or generate 11.67% return on investment over 90 days.

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

Jindal Steel Power  vs.  LLOYDS METALS AND

Jindal Steel Power

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Jindal Steel Power are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable basic indicators, Jindal Steel is not utilizing all of its potentials. The recent stock price uproar, may contribute to short-horizon losses for the private investors.

LLOYDS METALS AND

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in LLOYDS METALS AND are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of very unsteady basic indicators, LLOYDS METALS may actually be approaching a critical reversion point that can send shares even higher in August 2025.

Pair Trading with Jindal Steel and LLOYDS METALS

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

The idea behind Jindal Steel Power and LLOYDS METALS AND 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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.