Correlation Between State Trading and JIO Financial

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

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

Diversification Opportunities for State Trading and JIO Financial

0.59

Correlation Coefficient

State Trading  JIO Financial

Very weak diversification

The 3 months correlation between State and JIO is 0.59. Overlapping area represents the amount of risk that can be diversified away by holding The State Trading and JIO Financial Services in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on JIO Financial Services and State Trading 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 The State Trading are associated (or correlated) with JIO Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of JIO Financial Services has no effect on the direction of State Trading i.e., State Trading and JIO Financial go up and down completely randomly.

Pair Corralation between State Trading and JIO Financial

Assuming the 90 days trading horizon State Trading is expected to generate 3.89 times less return on investment than JIO Financial. In addition to that, State Trading is 1.66 times more volatile than JIO Financial Services. It trades about 0.03 of its total potential returns per unit of risk. JIO Financial Services is currently generating about 0.18 per unit of volatility. If you would invest  25,878  in JIO Financial Services on April 24, 2025 and sell it today you would earn a total of  5,202  from holding JIO Financial Services or generate 20.1% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	98.44%
Values	Daily Returns

The State Trading  vs.  JIO Financial Services

State Trading

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in The State Trading are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite fairly strong fundamental indicators, State Trading is not utilizing all of its potentials. The newest stock price confusion, may contribute to short-horizon losses for the traders.

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 13 (%) of all global equities and portfolios over the last 90 days. Despite somewhat inconsistent technical and fundamental indicators, JIO Financial sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with State Trading and JIO Financial

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

The idea behind The State Trading and JIO Financial Services 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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.