Correlation Between JS Investments and NetSol Technologies

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

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

Diversification Opportunities for JS Investments and NetSol Technologies

0.46

Correlation Coefficient

JS Investments  NetSol Technologies

Very weak diversification

The 3 months correlation between JSIL and NetSol is 0.46. Overlapping area represents the amount of risk that can be diversified away by holding JS Investments and NetSol Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NetSol Technologies and JS Investments 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 JS Investments are associated (or correlated) with NetSol Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NetSol Technologies has no effect on the direction of JS Investments i.e., JS Investments and NetSol Technologies go up and down completely randomly.

Pair Corralation between JS Investments and NetSol Technologies

Assuming the 90 days trading horizon JS Investments is expected to generate 1.36 times more return on investment than NetSol Technologies. However, JS Investments is 1.36 times more volatile than NetSol Technologies. It trades about 0.16 of its potential returns per unit of risk. NetSol Technologies is currently generating about 0.04 per unit of risk. If you would invest  2,350  in JS Investments on May 28, 2025 and sell it today you would earn a total of  836.00  from holding JS Investments or generate 35.57% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	90.16%
Values	Daily Returns

JS Investments  vs.  NetSol Technologies

JS Investments

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in JS Investments are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, JS Investments sustained solid returns over the last few months and may actually be approaching a breakup point.

NetSol Technologies

Risk-Adjusted Performance

Soft

Compared to the overall equity markets, risk-adjusted returns on investments in NetSol Technologies are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, NetSol Technologies may actually be approaching a critical reversion point that can send shares even higher in September 2025.

Pair Trading with JS Investments and NetSol Technologies

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

The idea behind JS Investments and NetSol Technologies 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.

Check out your portfolio center.

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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..