Correlation Between G Tec and Nahar Industrial

Can any of the company-specific risk be diversified away by investing in both G Tec and Nahar Industrial 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 G Tec and Nahar Industrial into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between G Tec Jainx Education and Nahar Industrial Enterprises, you can compare the effects of market volatilities on G Tec and Nahar Industrial 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 G Tec with a short position of Nahar Industrial. Check out your portfolio center. Please also check ongoing floating volatility patterns of G Tec and Nahar Industrial.

Diversification Opportunities for G Tec and Nahar Industrial

0.38

Correlation Coefficient

G Tec  Nahar Industrial

Weak diversification

The 3 months correlation between GTECJAINX and Nahar is 0.38. Overlapping area represents the amount of risk that can be diversified away by holding G Tec Jainx Education and Nahar Industrial Enterprises in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nahar Industrial Ent and G Tec 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 G Tec Jainx Education are associated (or correlated) with Nahar Industrial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nahar Industrial Ent has no effect on the direction of G Tec i.e., G Tec and Nahar Industrial go up and down completely randomly.

Pair Corralation between G Tec and Nahar Industrial

Assuming the 90 days trading horizon G Tec Jainx Education is expected to under-perform the Nahar Industrial. In addition to that, G Tec is 1.57 times more volatile than Nahar Industrial Enterprises. It trades about -0.22 of its total potential returns per unit of risk. Nahar Industrial Enterprises is currently generating about 0.02 per unit of volatility. If you would invest  14,973  in Nahar Industrial Enterprises on September 21, 2024 and sell it today you would earn a total of  205.00  from holding Nahar Industrial Enterprises or generate 1.37% return on investment over 90 days.

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

G Tec Jainx Education  vs.  Nahar Industrial Enterprises

G Tec Jainx

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days G Tec Jainx Education has generated negative risk-adjusted returns adding no value to investors with long positions. Despite unsteady performance in the last few months, the Stock's forward indicators remain fairly strong which may send shares a bit higher in January 2025. The recent confusion may also be a sign of long-lasting up-swing for the firm traders.

Nahar Industrial Ent

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Nahar Industrial Enterprises are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of very healthy fundamental indicators, Nahar Industrial is not utilizing all of its potentials. The latest stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with G Tec and Nahar Industrial

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

The idea behind G Tec Jainx Education and Nahar Industrial Enterprises 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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.