Correlation Between Jerash Holdings and Wearable Devices

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

By analyzing existing cross correlation between Jerash Holdings and Wearable Devices, you can compare the effects of market volatilities on Jerash Holdings and Wearable Devices 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 Jerash Holdings with a short position of Wearable Devices. Check out your portfolio center. Please also check ongoing floating volatility patterns of Jerash Holdings and Wearable Devices.

Diversification Opportunities for Jerash Holdings and Wearable Devices

-0.59

Correlation Coefficient

Jerash Holdings  Wearable Devices

Excellent diversification

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

Pair Corralation between Jerash Holdings and Wearable Devices

Given the investment horizon of 90 days Jerash Holdings is expected to generate 0.16 times more return on investment than Wearable Devices. However, Jerash Holdings is 6.36 times less risky than Wearable Devices. It trades about 0.1 of its potential returns per unit of risk. Wearable Devices is currently generating about -0.01 per unit of risk. If you would invest  298.00  in Jerash Holdings on May 6, 2025 and sell it today you would earn a total of  32.00  from holding Jerash Holdings or generate 10.74% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	64.52%
Values	Daily Returns

Jerash Holdings  vs.  Wearable Devices

Jerash Holdings

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Jerash Holdings are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Despite fairly inconsistent basic indicators, Jerash Holdings may actually be approaching a critical reversion point that can send shares even higher in September 2025.

Wearable Devices

Risk-Adjusted Performance

Very Weak

Over the last 90 days Wearable Devices has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest weak performance, the Stock's basic indicators remain stable and the latest fuss on Wall Street may also be a sign of long-term gains for the venture sophisticated investors.

Pair Trading with Jerash Holdings and Wearable Devices

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

The idea behind Jerash Holdings and Wearable Devices 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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.