Correlation Between Amrutanjan Health and Fertilizers

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

By analyzing existing cross correlation between Amrutanjan Health Care and Fertilizers and Chemicals, you can compare the effects of market volatilities on Amrutanjan Health and Fertilizers 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 Amrutanjan Health with a short position of Fertilizers. Check out your portfolio center. Please also check ongoing floating volatility patterns of Amrutanjan Health and Fertilizers.

Diversification Opportunities for Amrutanjan Health and Fertilizers

0.93

Correlation Coefficient

Amrutanjan Health  Fertilizers

Almost no diversification

The 3 months correlation between Amrutanjan and Fertilizers is 0.93. Overlapping area represents the amount of risk that can be diversified away by holding Amrutanjan Health Care and Fertilizers and Chemicals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fertilizers and Chemicals and Amrutanjan Health 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 Amrutanjan Health Care are associated (or correlated) with Fertilizers. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fertilizers and Chemicals has no effect on the direction of Amrutanjan Health i.e., Amrutanjan Health and Fertilizers go up and down completely randomly.

Pair Corralation between Amrutanjan Health and Fertilizers

Assuming the 90 days trading horizon Amrutanjan Health Care is expected to generate 0.59 times more return on investment than Fertilizers. However, Amrutanjan Health Care is 1.7 times less risky than Fertilizers. It trades about -0.22 of its potential returns per unit of risk. Fertilizers and Chemicals is currently generating about -0.18 per unit of risk. If you would invest  73,929  in Amrutanjan Health Care on December 2, 2024 and sell it today you would lose (16,154) from holding Amrutanjan Health Care or give up 21.85% of portfolio value over 90 days.

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

Amrutanjan Health Care  vs.  Fertilizers and Chemicals

Amrutanjan Health Care

Risk-Adjusted Performance

Very Weak

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

Fertilizers and Chemicals

Risk-Adjusted Performance

Very Weak

Over the last 90 days Fertilizers and Chemicals 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 basic indicators remain comparatively stable which may send shares a bit higher in April 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Pair Trading with Amrutanjan Health and Fertilizers

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

The idea behind Amrutanjan Health Care and Fertilizers and Chemicals 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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.