Correlation Between Ekarat Engineering and Green Resources

Can any of the company-specific risk be diversified away by investing in both Ekarat Engineering and Green Resources 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 Green Resources 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 Green Resources Public, you can compare the effects of market volatilities on Ekarat Engineering and Green Resources 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 Green Resources. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ekarat Engineering and Green Resources.

Diversification Opportunities for Ekarat Engineering and Green Resources

-0.31

Correlation Coefficient

Ekarat Engineering  Green Resources

Very good diversification

The 3 months correlation between Ekarat and Green is -0.31. Overlapping area represents the amount of risk that can be diversified away by holding Ekarat Engineering Public and Green Resources Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Green Resources Public 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 Green Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Green Resources Public has no effect on the direction of Ekarat Engineering i.e., Ekarat Engineering and Green Resources go up and down completely randomly.

Pair Corralation between Ekarat Engineering and Green Resources

Assuming the 90 days trading horizon Ekarat Engineering Public is expected to generate 0.88 times more return on investment than Green Resources. However, Ekarat Engineering Public is 1.13 times less risky than Green Resources. It trades about 0.17 of its potential returns per unit of risk. Green Resources Public is currently generating about -0.2 per unit of risk. If you would invest  95.00  in Ekarat Engineering Public on October 9, 2024 and sell it today you would earn a total of  5.00  from holding Ekarat Engineering Public or generate 5.26% return on investment over 90 days.

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

Ekarat Engineering Public  vs.  Green Resources Public

Ekarat Engineering Public

Risk-Adjusted Performance

6 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Ekarat Engineering Public are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite quite conflicting basic indicators, Ekarat Engineering may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Green Resources Public

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Green Resources Public has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest conflicting performance, the Stock's fundamental drivers remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

Pair Trading with Ekarat Engineering and Green Resources

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

The idea behind Ekarat Engineering Public and Green Resources Public 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 Commodity Directory module to find actively traded commodities issued by global exchanges.