Correlation Between Ankit Metal and Sunflag Iron

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

By analyzing existing cross correlation between Ankit Metal Power and Sunflag Iron And, you can compare the effects of market volatilities on Ankit Metal and Sunflag Iron 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 Ankit Metal with a short position of Sunflag Iron. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ankit Metal and Sunflag Iron.

Diversification Opportunities for Ankit Metal and Sunflag Iron

-0.13

Correlation Coefficient

Ankit Metal  Sunflag Iron

Good diversification

The 3 months correlation between Ankit and Sunflag is -0.13. Overlapping area represents the amount of risk that can be diversified away by holding Ankit Metal Power and Sunflag Iron And in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sunflag Iron And and Ankit Metal 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 Ankit Metal Power are associated (or correlated) with Sunflag Iron. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sunflag Iron And has no effect on the direction of Ankit Metal i.e., Ankit Metal and Sunflag Iron go up and down completely randomly.

Pair Corralation between Ankit Metal and Sunflag Iron

Assuming the 90 days trading horizon Ankit Metal Power is expected to under-perform the Sunflag Iron. In addition to that, Ankit Metal is 1.23 times more volatile than Sunflag Iron And. It trades about -0.07 of its total potential returns per unit of risk. Sunflag Iron And is currently generating about 0.01 per unit of volatility. If you would invest  21,479  in Sunflag Iron And on September 2, 2024 and sell it today you would lose (86.00) from holding Sunflag Iron And or give up 0.4% of portfolio value over 90 days.

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

Ankit Metal Power  vs.  Sunflag Iron And

Ankit Metal Power

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Ankit Metal Power has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of uncertain performance in the last few months, the Stock's basic indicators remain rather sound which may send shares a bit higher in January 2025. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

Sunflag Iron And

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Sunflag Iron And has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable essential indicators, Sunflag Iron is not utilizing all of its potentials. The latest stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Ankit Metal and Sunflag Iron

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

The idea behind Ankit Metal Power and Sunflag Iron And 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 Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.