Correlation Between Rajshree Sugars and JGCHEMICALS

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

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

Diversification Opportunities for Rajshree Sugars and JGCHEMICALS

0.22

Correlation Coefficient

Rajshree Sugars  JGCHEMICALS

Modest diversification

The 3 months correlation between Rajshree and JGCHEMICALS is 0.22. Overlapping area represents the amount of risk that can be diversified away by holding Rajshree Sugars Chemicals and JGCHEMICALS LIMITED in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on JGCHEMICALS LIMITED and Rajshree Sugars 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 Rajshree Sugars Chemicals are associated (or correlated) with JGCHEMICALS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of JGCHEMICALS LIMITED has no effect on the direction of Rajshree Sugars i.e., Rajshree Sugars and JGCHEMICALS go up and down completely randomly.

Pair Corralation between Rajshree Sugars and JGCHEMICALS

Assuming the 90 days trading horizon Rajshree Sugars Chemicals is expected to under-perform the JGCHEMICALS. But the stock apears to be less risky and, when comparing its historical volatility, Rajshree Sugars Chemicals is 1.55 times less risky than JGCHEMICALS. The stock trades about -0.01 of its potential returns per unit of risk. The JGCHEMICALS LIMITED is currently generating about 0.17 of returns per unit of risk over similar time horizon. If you would invest  36,070  in JGCHEMICALS LIMITED on April 24, 2025 and sell it today you would earn a total of  14,020  from holding JGCHEMICALS LIMITED or generate 38.87% return on investment over 90 days.

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

Rajshree Sugars Chemicals  vs.  JGCHEMICALS LIMITED

Rajshree Sugars Chemicals

Risk-Adjusted Performance

Very Weak

Over the last 90 days Rajshree Sugars Chemicals has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound basic indicators, Rajshree Sugars is not utilizing all of its potentials. The recent stock price tumult, may contribute to shorter-term losses for the shareholders.

JGCHEMICALS LIMITED

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in JGCHEMICALS LIMITED are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak technical indicators, JGCHEMICALS sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Rajshree Sugars and JGCHEMICALS

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

The idea behind Rajshree Sugars Chemicals and JGCHEMICALS LIMITED 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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.