Correlation Between Akme Fintrade and Hisar Metal

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

By analyzing existing cross correlation between Akme Fintrade India and Hisar Metal Industries, you can compare the effects of market volatilities on Akme Fintrade and Hisar Metal 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 Akme Fintrade with a short position of Hisar Metal. Check out your portfolio center. Please also check ongoing floating volatility patterns of Akme Fintrade and Hisar Metal.

Diversification Opportunities for Akme Fintrade and Hisar Metal

0.83

Correlation Coefficient

Akme Fintrade  Hisar Metal

Very poor diversification

The 3 months correlation between Akme and Hisar is 0.83. Overlapping area represents the amount of risk that can be diversified away by holding Akme Fintrade India and Hisar Metal Industries in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hisar Metal Industries and Akme Fintrade 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 Akme Fintrade India are associated (or correlated) with Hisar Metal. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hisar Metal Industries has no effect on the direction of Akme Fintrade i.e., Akme Fintrade and Hisar Metal go up and down completely randomly.

Pair Corralation between Akme Fintrade and Hisar Metal

Assuming the 90 days trading horizon Akme Fintrade India is expected to under-perform the Hisar Metal. But the stock apears to be less risky and, when comparing its historical volatility, Akme Fintrade India is 1.18 times less risky than Hisar Metal. The stock trades about -0.22 of its potential returns per unit of risk. The Hisar Metal Industries is currently generating about -0.07 of returns per unit of risk over similar time horizon. If you would invest  19,419  in Hisar Metal Industries on September 1, 2024 and sell it today you would lose (2,173) from holding Hisar Metal Industries or give up 11.19% of portfolio value over 90 days.

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

Akme Fintrade India  vs.  Hisar Metal Industries

Akme Fintrade India

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Akme Fintrade India has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of conflicting performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in December 2024. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Hisar Metal Industries

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Hisar Metal Industries has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest conflicting performance, the Stock's basic indicators remain sound and the latest tumult on Wall Street may also be a sign of longer-term gains for the firm shareholders.

Pair Trading with Akme Fintrade and Hisar Metal

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

The idea behind Akme Fintrade India and Hisar Metal Industries 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..