Correlation Between Akme Fintrade and PI Industries

Can any of the company-specific risk be diversified away by investing in both Akme Fintrade and PI Industries 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 PI Industries 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 PI Industries Limited, you can compare the effects of market volatilities on Akme Fintrade and PI Industries 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 PI Industries. Check out your portfolio center. Please also check ongoing floating volatility patterns of Akme Fintrade and PI Industries.

Diversification Opportunities for Akme Fintrade and PI Industries

0.57

Correlation Coefficient

Akme Fintrade  PI Industries

Very weak diversification

The 3 months correlation between Akme and PIIND is 0.57. Overlapping area represents the amount of risk that can be diversified away by holding Akme Fintrade India and PI Industries Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PI Industries 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 PI Industries. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PI Industries Limited has no effect on the direction of Akme Fintrade i.e., Akme Fintrade and PI Industries go up and down completely randomly.

Pair Corralation between Akme Fintrade and PI Industries

Assuming the 90 days trading horizon Akme Fintrade India is expected to under-perform the PI Industries. In addition to that, Akme Fintrade is 2.46 times more volatile than PI Industries Limited. It trades about -0.06 of its total potential returns per unit of risk. PI Industries Limited is currently generating about 0.01 per unit of volatility. If you would invest  346,406  in PI Industries Limited on October 24, 2024 and sell it today you would earn a total of  3,659  from holding PI Industries Limited or generate 1.06% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	36.12%
Values	Daily Returns

Akme Fintrade India  vs.  PI Industries 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.

PI Industries Limited

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days PI Industries Limited has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of inconsistent performance in the last few months, the Stock's forward indicators remain very healthy which may send shares a bit higher in February 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

Pair Trading with Akme Fintrade and PI Industries

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

The idea behind Akme Fintrade India and PI Industries 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.

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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 Money Managers module to screen money managers from public funds and ETFs managed around the world.