Correlation Between JS Bank and Engro Polymer

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

By analyzing existing cross correlation between JS Bank and Engro Polymer Chemicals, you can compare the effects of market volatilities on JS Bank and Engro Polymer 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 JS Bank with a short position of Engro Polymer. Check out your portfolio center. Please also check ongoing floating volatility patterns of JS Bank and Engro Polymer.

Diversification Opportunities for JS Bank and Engro Polymer

0.35

Correlation Coefficient

JS Bank  Engro Polymer

Weak diversification

The 3 months correlation between JSBL and Engro is 0.35. Overlapping area represents the amount of risk that can be diversified away by holding JS Bank and Engro Polymer Chemicals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Engro Polymer Chemicals and JS Bank 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 JS Bank are associated (or correlated) with Engro Polymer. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Engro Polymer Chemicals has no effect on the direction of JS Bank i.e., JS Bank and Engro Polymer go up and down completely randomly.

Pair Corralation between JS Bank and Engro Polymer

Assuming the 90 days trading horizon JS Bank is expected to generate 1.99 times more return on investment than Engro Polymer. However, JS Bank is 1.99 times more volatile than Engro Polymer Chemicals. It trades about 0.37 of its potential returns per unit of risk. Engro Polymer Chemicals is currently generating about 0.02 per unit of risk. If you would invest  860.00  in JS Bank on April 22, 2025 and sell it today you would earn a total of  586.00  from holding JS Bank or generate 68.14% return on investment over 90 days.

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

JS Bank  vs.  Engro Polymer Chemicals

JS Bank

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in JS Bank are ranked lower than 20 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, JS Bank sustained solid returns over the last few months and may actually be approaching a breakup point.

Engro Polymer Chemicals

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Engro Polymer Chemicals are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong basic indicators, Engro Polymer is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with JS Bank and Engro Polymer

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

The idea behind JS Bank and Engro Polymer Chemicals 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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.