Correlation Between Ekarat Engineering and IRPC Public

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

Diversification Opportunities for Ekarat Engineering and IRPC Public

-0.8

Correlation Coefficient

Ekarat Engineering  IRPC Public

Pay attention - limited upside

The 3 months correlation between Ekarat and IRPC is -0.8. Overlapping area represents the amount of risk that can be diversified away by holding Ekarat Engineering Public and IRPC Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on IRPC 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 IRPC Public. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of IRPC Public has no effect on the direction of Ekarat Engineering i.e., Ekarat Engineering and IRPC Public go up and down completely randomly.

Pair Corralation between Ekarat Engineering and IRPC Public

Assuming the 90 days trading horizon Ekarat Engineering Public is expected to generate 0.85 times more return on investment than IRPC Public. However, Ekarat Engineering Public is 1.17 times less risky than IRPC Public. It trades about 0.08 of its potential returns per unit of risk. IRPC Public is currently generating about -0.24 per unit of risk. If you would invest  92.00  in Ekarat Engineering Public on October 25, 2024 and sell it today you would earn a total of  6.00  from holding Ekarat Engineering Public or generate 6.52% return on investment over 90 days.

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

Ekarat Engineering Public  vs.  IRPC Public

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 conflicting basic indicators, Ekarat Engineering may actually be approaching a critical reversion point that can send shares even higher in February 2025.

IRPC Public

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days IRPC Public has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak 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 IRPC Public

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

The idea behind Ekarat Engineering Public and IRPC 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.

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 Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.