Correlation Between Ekarat Engineering and Global Power

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

By analyzing existing cross correlation between Ekarat Engineering Public and Global Power Synergy, you can compare the effects of market volatilities on Ekarat Engineering and Global Power 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 Ekarat Engineering with a short position of Global Power. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ekarat Engineering and Global Power.

Diversification Opportunities for Ekarat Engineering and Global Power

-0.62

Correlation Coefficient

Ekarat Engineering  Global Power

Excellent diversification

The 3 months correlation between Ekarat and Global is -0.62. Overlapping area represents the amount of risk that can be diversified away by holding Ekarat Engineering Public and Global Power Synergy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Global Power Synergy and Ekarat Engineering 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 Ekarat Engineering Public are associated (or correlated) with Global Power. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Global Power Synergy has no effect on the direction of Ekarat Engineering i.e., Ekarat Engineering and Global Power go up and down completely randomly.

Pair Corralation between Ekarat Engineering and Global Power

Assuming the 90 days trading horizon Ekarat Engineering Public is expected to generate 21.47 times more return on investment than Global Power. However, Ekarat Engineering is 21.47 times more volatile than Global Power Synergy. It trades about 0.04 of its potential returns per unit of risk. Global Power Synergy is currently generating about -0.06 per unit of risk. If you would invest  88.00  in Ekarat Engineering Public on October 11, 2024 and sell it today you would earn a total of  11.00  from holding Ekarat Engineering Public or generate 12.5% return on investment over 90 days.

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

Ekarat Engineering Public  vs.  Global Power Synergy

Ekarat Engineering Public

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Ekarat Engineering Public are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite quite persistent basic indicators, Ekarat Engineering is not utilizing all of its potentials. The latest stock price mess, may contribute to short-term losses for the institutional investors.

Global Power Synergy

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Global Power Synergy has generated negative risk-adjusted returns adding no value to investors with long positions. Despite conflicting performance in the last few months, the Stock's forward-looking signals remain quite persistent which may send shares a bit higher in February 2025. The latest mess may also be a sign of long-standing up-swing for the company institutional investors.

Pair Trading with Ekarat Engineering and Global Power

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

The idea behind Ekarat Engineering Public and Global Power Synergy 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 Portfolio Dashboard module to portfolio dashboard that provides centralized access to all your investments.