Correlation Between Yatharth Hospital and Mahamaya Steel

Can any of the company-specific risk be diversified away by investing in both Yatharth Hospital and Mahamaya Steel 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 Yatharth Hospital and Mahamaya Steel into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Yatharth Hospital Trauma and Mahamaya Steel Industries, you can compare the effects of market volatilities on Yatharth Hospital and Mahamaya Steel 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 Yatharth Hospital with a short position of Mahamaya Steel. Check out your portfolio center. Please also check ongoing floating volatility patterns of Yatharth Hospital and Mahamaya Steel.

Diversification Opportunities for Yatharth Hospital and Mahamaya Steel

0.34

Correlation Coefficient

Yatharth Hospital  Mahamaya Steel

Weak diversification

The 3 months correlation between Yatharth and Mahamaya is 0.34. Overlapping area represents the amount of risk that can be diversified away by holding Yatharth Hospital Trauma and Mahamaya Steel Industries in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mahamaya Steel Industries and Yatharth Hospital 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 Yatharth Hospital Trauma are associated (or correlated) with Mahamaya Steel. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mahamaya Steel Industries has no effect on the direction of Yatharth Hospital i.e., Yatharth Hospital and Mahamaya Steel go up and down completely randomly.

Pair Corralation between Yatharth Hospital and Mahamaya Steel

Assuming the 90 days trading horizon Yatharth Hospital Trauma is expected to generate 0.86 times more return on investment than Mahamaya Steel. However, Yatharth Hospital Trauma is 1.16 times less risky than Mahamaya Steel. It trades about -0.03 of its potential returns per unit of risk. Mahamaya Steel Industries is currently generating about -0.24 per unit of risk. If you would invest  59,920  in Yatharth Hospital Trauma on September 29, 2024 and sell it today you would lose (990.00) from holding Yatharth Hospital Trauma or give up 1.65% of portfolio value over 90 days.

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

Yatharth Hospital Trauma  vs.  Mahamaya Steel Industries

Yatharth Hospital Trauma

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Yatharth Hospital Trauma are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable basic indicators, Yatharth Hospital is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

Mahamaya Steel Industries

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Mahamaya Steel Industries has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound technical and fundamental indicators, Mahamaya Steel is not utilizing all of its potentials. The latest stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with Yatharth Hospital and Mahamaya Steel

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

The idea behind Yatharth Hospital Trauma and Mahamaya Steel Industries 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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.