Correlation Between AXISCADES Technologies and Agro Tech

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

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

Diversification Opportunities for AXISCADES Technologies and Agro Tech

-0.36

Correlation Coefficient

AXISCADES Technologies  Agro Tech

Very good diversification

The 3 months correlation between AXISCADES and Agro is -0.36. Overlapping area represents the amount of risk that can be diversified away by holding AXISCADES Technologies Limited and Agro Tech Foods in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Agro Tech Foods and AXISCADES Technologies 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 AXISCADES Technologies Limited are associated (or correlated) with Agro Tech. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Agro Tech Foods has no effect on the direction of AXISCADES Technologies i.e., AXISCADES Technologies and Agro Tech go up and down completely randomly.

Pair Corralation between AXISCADES Technologies and Agro Tech

Assuming the 90 days trading horizon AXISCADES Technologies is expected to generate 4.23 times less return on investment than Agro Tech. In addition to that, AXISCADES Technologies is 1.04 times more volatile than Agro Tech Foods. It trades about 0.03 of its total potential returns per unit of risk. Agro Tech Foods is currently generating about 0.13 per unit of volatility. If you would invest  77,234  in Agro Tech Foods on September 17, 2024 and sell it today you would earn a total of  20,871  from holding Agro Tech Foods or generate 27.02% return on investment over 90 days.

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

AXISCADES Technologies Limited  vs.  Agro Tech Foods

AXISCADES Technologies

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in AXISCADES Technologies Limited are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady fundamental indicators, AXISCADES Technologies may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Agro Tech Foods

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Agro Tech Foods are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, Agro Tech unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with AXISCADES Technologies and Agro Tech

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

The idea behind AXISCADES Technologies Limited and Agro Tech Foods 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 Stocks Directory module to find actively traded stocks across global markets.