Correlation Between Akme Fintrade and EPL

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

By analyzing existing cross correlation between Akme Fintrade India and EPL Limited, you can compare the effects of market volatilities on Akme Fintrade and EPL 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 Akme Fintrade with a short position of EPL. Check out your portfolio center. Please also check ongoing floating volatility patterns of Akme Fintrade and EPL.

Diversification Opportunities for Akme Fintrade and EPL

-0.47

Correlation Coefficient

Akme Fintrade  EPL

Very good diversification

The 3 months correlation between Akme and EPL is -0.47. Overlapping area represents the amount of risk that can be diversified away by holding Akme Fintrade India and EPL Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on EPL Limited and Akme Fintrade 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 Akme Fintrade India are associated (or correlated) with EPL. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of EPL Limited has no effect on the direction of Akme Fintrade i.e., Akme Fintrade and EPL go up and down completely randomly.

Pair Corralation between Akme Fintrade and EPL

Assuming the 90 days trading horizon Akme Fintrade India is expected to generate 1.39 times more return on investment than EPL. However, Akme Fintrade is 1.39 times more volatile than EPL Limited. It trades about 0.16 of its potential returns per unit of risk. EPL Limited is currently generating about 0.1 per unit of risk. If you would invest  9,264  in Akme Fintrade India on September 13, 2024 and sell it today you would earn a total of  1,204  from holding Akme Fintrade India or generate 13.0% return on investment over 90 days.

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

Akme Fintrade India  vs.  EPL Limited

Akme Fintrade India

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Akme Fintrade India 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 stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the firm private investors.

EPL Limited

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in EPL Limited are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of rather uncertain technical and fundamental indicators, EPL may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Akme Fintrade and EPL

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

The idea behind Akme Fintrade India and EPL Limited 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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.