Correlation Between JIO Financial and State Trading

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

By analyzing existing cross correlation between JIO Financial Services and The State Trading, you can compare the effects of market volatilities on JIO Financial and State Trading 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 JIO Financial with a short position of State Trading. Check out your portfolio center. Please also check ongoing floating volatility patterns of JIO Financial and State Trading.

Diversification Opportunities for JIO Financial and State Trading

0.61

Correlation Coefficient

JIO Financial  State Trading

Poor diversification

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

Pair Corralation between JIO Financial and State Trading

Assuming the 90 days trading horizon JIO Financial Services is expected to generate 0.58 times more return on investment than State Trading. However, JIO Financial Services is 1.74 times less risky than State Trading. It trades about 0.18 of its potential returns per unit of risk. The State Trading is currently generating about 0.07 per unit of risk. If you would invest  25,814  in JIO Financial Services on April 23, 2025 and sell it today you would earn a total of  5,266  from holding JIO Financial Services or generate 20.4% return on investment over 90 days.

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

JIO Financial Services  vs.  The State Trading

JIO Financial Services

Risk-Adjusted Performance

Good

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

State Trading

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in The State Trading are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite fairly uncertain fundamental indicators, State Trading may actually be approaching a critical reversion point that can send shares even higher in August 2025.

Pair Trading with JIO Financial and State Trading

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

The idea behind JIO Financial Services and The State Trading 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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.