Correlation Between Total Transport and Ankit Metal

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

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

Diversification Opportunities for Total Transport and Ankit Metal

0.55

Correlation Coefficient

Total Transport  Ankit Metal

Very weak diversification

The 3 months correlation between Total and Ankit is 0.55. Overlapping area represents the amount of risk that can be diversified away by holding Total Transport Systems 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 Total Transport 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 Total Transport Systems 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 Total Transport i.e., Total Transport and Ankit Metal go up and down completely randomly.

Pair Corralation between Total Transport and Ankit Metal

Assuming the 90 days trading horizon Total Transport Systems is expected to under-perform the Ankit Metal. But the stock apears to be less risky and, when comparing its historical volatility, Total Transport Systems is 1.58 times less risky than Ankit Metal. The stock trades about -0.24 of its potential returns per unit of risk. The Ankit Metal Power is currently generating about -0.07 of returns per unit of risk over similar time horizon. If you would invest  400.00  in Ankit Metal Power on September 2, 2024 and sell it today you would lose (60.00) from holding Ankit Metal Power or give up 15.0% of portfolio value over 90 days.

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

Total Transport Systems  vs.  Ankit Metal Power

Total Transport Systems

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Total Transport Systems has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unsteady performance in the last few months, the Stock's basic indicators remain very healthy which may send shares a bit higher in January 2025. The recent disarray may also be a sign of long period up-swing for the firm 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 uncertain performance in the last few months, the Stock's basic indicators remain rather sound which may send shares a bit higher in January 2025. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

Pair Trading with Total Transport and Ankit Metal

The main advantage of trading using opposite Total Transport and Ankit Metal positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Total Transport 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 Total Transport Systems 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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.