Correlation Between Jindal Stainless and Jindal Steel

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

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

Diversification Opportunities for Jindal Stainless and Jindal Steel

0.65

Correlation Coefficient

Jindal Stainless  Jindal Steel

Poor diversification

The 3 months correlation between Jindal and Jindal is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding Jindal Stainless Limited and Jindal Steel Power in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jindal Steel Power and Jindal Stainless 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 Stainless Limited are associated (or correlated) with Jindal Steel. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jindal Steel Power has no effect on the direction of Jindal Stainless i.e., Jindal Stainless and Jindal Steel go up and down completely randomly.

Pair Corralation between Jindal Stainless and Jindal Steel

Assuming the 90 days trading horizon Jindal Stainless Limited is expected to generate 1.2 times more return on investment than Jindal Steel. However, Jindal Stainless is 1.2 times more volatile than Jindal Steel Power. It trades about 0.16 of its potential returns per unit of risk. Jindal Steel Power is currently generating about 0.07 per unit of risk. If you would invest  57,250  in Jindal Stainless Limited on April 24, 2025 and sell it today you would earn a total of  11,640  from holding Jindal Stainless Limited or generate 20.33% return on investment over 90 days.

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

Jindal Stainless Limited  vs.  Jindal Steel Power

Jindal Stainless

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Jindal Stainless Limited are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. In spite of rather uncertain technical and fundamental indicators, Jindal Stainless exhibited solid returns over the last few months and may actually be approaching a breakup point.

Jindal Steel Power

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Jindal Steel Power are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively weak basic indicators, Jindal Steel may actually be approaching a critical reversion point that can send shares even higher in August 2025.

Pair Trading with Jindal Stainless and Jindal Steel

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

The idea behind Jindal Stainless Limited and Jindal Steel Power 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.