Correlation Between Investment Trust and Ankit Metal

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

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

Diversification Opportunities for Investment Trust and Ankit Metal

-0.23

Correlation Coefficient

Investment Trust  Ankit Metal

Very good diversification

The 3 months correlation between Investment and Ankit is -0.23. Overlapping area represents the amount of risk that can be diversified away by holding The Investment Trust 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 Investment Trust 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 The Investment Trust 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 Investment Trust i.e., Investment Trust and Ankit Metal go up and down completely randomly.

Pair Corralation between Investment Trust and Ankit Metal

Assuming the 90 days trading horizon The Investment Trust is expected to generate 0.92 times more return on investment than Ankit Metal. However, The Investment Trust is 1.09 times less risky than Ankit Metal. It trades about 0.08 of its potential returns per unit of risk. Ankit Metal Power is currently generating about -0.02 per unit of risk. If you would invest  18,603  in The Investment Trust on September 9, 2024 and sell it today you would earn a total of  2,129  from holding The Investment Trust or generate 11.44% return on investment over 90 days.

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

The Investment Trust  vs.  Ankit Metal Power

Investment Trust

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in The Investment Trust are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of rather inconsistent technical and fundamental indicators, Investment Trust exhibited solid returns over the last few months and may actually be approaching a breakup point.

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 rather sound basic indicators, Ankit Metal is not utilizing all of its potentials. The newest stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with Investment Trust and Ankit Metal

The main advantage of trading using opposite Investment Trust and Ankit Metal positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Investment Trust 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 The Investment Trust 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.

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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 Transaction History module to view history of all your transactions and understand their impact on performance.