Correlation Between Jindal Steel and MAS Financial

Can any of the company-specific risk be diversified away by investing in both Jindal Steel and MAS Financial 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 MAS Financial 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 MAS Financial Services, you can compare the effects of market volatilities on Jindal Steel and MAS Financial 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 MAS Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Jindal Steel and MAS Financial.

Diversification Opportunities for Jindal Steel and MAS Financial

0.48

Correlation Coefficient

Jindal Steel  MAS Financial

Very weak diversification

The 3 months correlation between Jindal and MAS is 0.48. Overlapping area represents the amount of risk that can be diversified away by holding Jindal Steel Power and MAS Financial Services in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MAS Financial Services 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 MAS Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MAS Financial Services has no effect on the direction of Jindal Steel i.e., Jindal Steel and MAS Financial go up and down completely randomly.

Pair Corralation between Jindal Steel and MAS Financial

Assuming the 90 days trading horizon Jindal Steel is expected to generate 3.78 times less return on investment than MAS Financial. But when comparing it to its historical volatility, Jindal Steel Power is 1.28 times less risky than MAS Financial. It trades about 0.05 of its potential returns per unit of risk. MAS Financial Services is currently generating about 0.15 of returns per unit of risk over similar time horizon. If you would invest  27,939  in MAS Financial Services on April 22, 2025 and sell it today you would earn a total of  5,911  from holding MAS Financial Services or generate 21.16% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	98.46%
Values	Daily Returns

Jindal Steel Power  vs.  MAS Financial Services

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 current stock price uproar, may contribute to short-horizon losses for the private investors.

MAS Financial Services

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in MAS Financial Services are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak technical and fundamental indicators, MAS Financial sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Jindal Steel and MAS Financial

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

The idea behind Jindal Steel Power and MAS Financial Services 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 Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.