Correlation Between JSW Steel and Sterling

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

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

Diversification Opportunities for JSW Steel and Sterling

0.0

Correlation Coefficient

JSW Steel  Sterling

Pay attention - limited upside

The 3 months correlation between JSW and Sterling is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding JSW Steel Limited and Sterling and Wilson in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sterling and Wilson and JSW 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 JSW Steel Limited are associated (or correlated) with Sterling. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sterling and Wilson has no effect on the direction of JSW Steel i.e., JSW Steel and Sterling go up and down completely randomly.

Pair Corralation between JSW Steel and Sterling

If you would invest  103,122  in JSW Steel Limited on April 20, 2025 and sell it today you would earn a total of  318.00  from holding JSW Steel Limited or generate 0.31% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

JSW Steel Limited  vs.  Sterling and Wilson

JSW Steel Limited

Risk-Adjusted Performance

Very Weak

Over the last 90 days JSW Steel Limited has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound technical and fundamental indicators, JSW Steel is not utilizing all of its potentials. The newest stock price tumult, may contribute to shorter-term losses for the shareholders.

Sterling and Wilson

Risk-Adjusted Performance

Weak

Over the last 90 days Sterling and Wilson has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable essential indicators, Sterling is not utilizing all of its potentials. The current stock price agitation, may contribute to short-term losses for the retail investors.

Pair Trading with JSW Steel and Sterling

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

The idea behind JSW Steel Limited and Sterling and Wilson 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 Money Managers module to screen money managers from public funds and ETFs managed around the world.