Correlation Between Metalyst Forgings and Industrial Investment

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

By analyzing existing cross correlation between Metalyst Forgings Limited and Industrial Investment Trust, you can compare the effects of market volatilities on Metalyst Forgings and Industrial Investment 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 Metalyst Forgings with a short position of Industrial Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Metalyst Forgings and Industrial Investment.

Diversification Opportunities for Metalyst Forgings and Industrial Investment

0.0

Correlation Coefficient

Metalyst Forgings  Industrial Investment

Pay attention - limited upside

The 3 months correlation between Metalyst and Industrial is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Metalyst Forgings Limited and Industrial Investment Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Industrial Investment and Metalyst Forgings 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 Metalyst Forgings Limited are associated (or correlated) with Industrial Investment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Industrial Investment has no effect on the direction of Metalyst Forgings i.e., Metalyst Forgings and Industrial Investment go up and down completely randomly.

Pair Corralation between Metalyst Forgings and Industrial Investment

If you would invest  25,700  in Industrial Investment Trust on September 5, 2024 and sell it today you would earn a total of  15,330  from holding Industrial Investment Trust or generate 59.65% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	98.41%
Values	Daily Returns

Metalyst Forgings Limited  vs.  Industrial Investment Trust

Metalyst Forgings

Risk-Adjusted Performance

0 of 100

Very Weak

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

Industrial Investment

Risk-Adjusted Performance

29 of 100

Strong

Compared to the overall equity markets, risk-adjusted returns on investments in Industrial Investment Trust are ranked lower than 29 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively unsteady basic indicators, Industrial Investment unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Metalyst Forgings and Industrial Investment

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

The idea behind Metalyst Forgings Limited and Industrial Investment Trust 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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.