Correlation Between Gokul Refoils and Silgo Retail

Can any of the company-specific risk be diversified away by investing in both Gokul Refoils and Silgo Retail 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 Gokul Refoils and Silgo Retail into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Gokul Refoils and and Silgo Retail Limited, you can compare the effects of market volatilities on Gokul Refoils and Silgo Retail 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 Gokul Refoils with a short position of Silgo Retail. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gokul Refoils and Silgo Retail.

Diversification Opportunities for Gokul Refoils and Silgo Retail

-0.25

Correlation Coefficient

Gokul Refoils  Silgo Retail

Very good diversification

The 3 months correlation between Gokul and Silgo is -0.25. Overlapping area represents the amount of risk that can be diversified away by holding Gokul Refoils and and Silgo Retail Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Silgo Retail Limited and Gokul Refoils 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 Gokul Refoils and are associated (or correlated) with Silgo Retail. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Silgo Retail Limited has no effect on the direction of Gokul Refoils i.e., Gokul Refoils and Silgo Retail go up and down completely randomly.

Pair Corralation between Gokul Refoils and Silgo Retail

Assuming the 90 days trading horizon Gokul Refoils and is expected to generate 0.76 times more return on investment than Silgo Retail. However, Gokul Refoils and is 1.31 times less risky than Silgo Retail. It trades about 0.1 of its potential returns per unit of risk. Silgo Retail Limited is currently generating about -0.02 per unit of risk. If you would invest  5,337  in Gokul Refoils and on September 19, 2024 and sell it today you would earn a total of  1,017  from holding Gokul Refoils and or generate 19.06% return on investment over 90 days.

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

Gokul Refoils and  vs.  Silgo Retail Limited

Gokul Refoils

Risk-Adjusted Performance

8 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Gokul Refoils and are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating forward-looking signals, Gokul Refoils displayed solid returns over the last few months and may actually be approaching a breakup point.

Silgo Retail Limited

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Silgo Retail Limited has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy essential indicators, Silgo Retail is not utilizing all of its potentials. The recent stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with Gokul Refoils and Silgo Retail

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

The idea behind Gokul Refoils and and Silgo Retail Limited 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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.