Correlation Between Jindal Steel and Sunflag Iron

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

Diversification Opportunities for Jindal Steel and Sunflag Iron

0.61

Correlation Coefficient

Jindal Steel  Sunflag Iron

Poor diversification

The 3 months correlation between Jindal and Sunflag is 0.61. Overlapping area represents the amount of risk that can be diversified away by holding Jindal Steel Power and Sunflag Iron And in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sunflag Iron 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 Sunflag Iron. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sunflag Iron And has no effect on the direction of Jindal Steel i.e., Jindal Steel and Sunflag Iron go up and down completely randomly.

Pair Corralation between Jindal Steel and Sunflag Iron

Assuming the 90 days trading horizon Jindal Steel is expected to generate 2.99 times less return on investment than Sunflag Iron. But when comparing it to its historical volatility, Jindal Steel Power is 1.66 times less risky than Sunflag Iron. It trades about 0.05 of its potential returns per unit of risk. Sunflag Iron And is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest  25,797  in Sunflag Iron And on April 23, 2025 and sell it today you would earn a total of  4,018  from holding Sunflag Iron And or generate 15.58% return on investment over 90 days.

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

Jindal Steel Power  vs.  Sunflag Iron 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 4 (%) 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 latest stock price uproar, may contribute to short-horizon losses for the private investors.

Sunflag Iron And

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Sunflag Iron And are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Despite nearly weak essential indicators, Sunflag Iron reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Jindal Steel and Sunflag Iron

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

The idea behind Jindal Steel Power and Sunflag Iron 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 Equity Valuation module to check real value of public entities based on technical and fundamental data.