Correlation Between POWERGRID Infrastructure and Ankit Metal

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

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

Diversification Opportunities for POWERGRID Infrastructure and Ankit Metal

0.57

Correlation Coefficient

POWERGRID Infrastructure  Ankit Metal

Very weak diversification

The 3 months correlation between POWERGRID and Ankit is 0.57. Overlapping area represents the amount of risk that can be diversified away by holding POWERGRID Infrastructure Inves and Ankit Metal Power in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ankit Metal Power and POWERGRID Infrastructure 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 POWERGRID Infrastructure Investment are associated (or correlated) with Ankit Metal. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ankit Metal Power has no effect on the direction of POWERGRID Infrastructure i.e., POWERGRID Infrastructure and Ankit Metal go up and down completely randomly.

Pair Corralation between POWERGRID Infrastructure and Ankit Metal

Assuming the 90 days trading horizon POWERGRID Infrastructure Investment is expected to generate 0.22 times more return on investment than Ankit Metal. However, POWERGRID Infrastructure Investment is 4.59 times less risky than Ankit Metal. It trades about -0.09 of its potential returns per unit of risk. Ankit Metal Power is currently generating about -0.06 per unit of risk. If you would invest  9,107  in POWERGRID Infrastructure Investment on September 6, 2024 and sell it today you would lose (352.00) from holding POWERGRID Infrastructure Investment or give up 3.87% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	98.41%
Values	Daily Returns

POWERGRID Infrastructure Inves  vs.  Ankit Metal Power

POWERGRID Infrastructure

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days POWERGRID Infrastructure Investment has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, POWERGRID Infrastructure is not utilizing all of its potentials. The latest stock price uproar, may contribute to short-horizon losses for the private investors.

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 latest weak performance, the Stock's basic indicators remain sound and the latest tumult on Wall Street may also be a sign of longer-term gains for the firm shareholders.

Pair Trading with POWERGRID Infrastructure and Ankit Metal

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

The idea behind POWERGRID Infrastructure Investment and Ankit Metal Power 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 Stocks Directory module to find actively traded stocks across global markets.