Correlation Between Ankit Metal and Diligent Media

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

By analyzing existing cross correlation between Ankit Metal Power and Diligent Media, you can compare the effects of market volatilities on Ankit Metal and Diligent Media 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 Ankit Metal with a short position of Diligent Media. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ankit Metal and Diligent Media.

Diversification Opportunities for Ankit Metal and Diligent Media

0.69

Correlation Coefficient

Ankit Metal  Diligent Media

Poor diversification

The 3 months correlation between Ankit and Diligent is 0.69. Overlapping area represents the amount of risk that can be diversified away by holding Ankit Metal Power and Diligent Media in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Diligent Media and Ankit Metal 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 Ankit Metal Power are associated (or correlated) with Diligent Media. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Diligent Media has no effect on the direction of Ankit Metal i.e., Ankit Metal and Diligent Media go up and down completely randomly.

Pair Corralation between Ankit Metal and Diligent Media

Assuming the 90 days trading horizon Ankit Metal Power is expected to under-perform the Diligent Media. But the stock apears to be less risky and, when comparing its historical volatility, Ankit Metal Power is 1.2 times less risky than Diligent Media. The stock trades about -0.01 of its potential returns per unit of risk. The Diligent Media is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest  315.00  in Diligent Media on October 27, 2024 and sell it today you would earn a total of  240.00  from holding Diligent Media or generate 76.19% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	95.9%
Values	Daily Returns

Ankit Metal Power  vs.  Diligent Media

Ankit Metal Power

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Ankit Metal Power are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of rather conflicting basic indicators, Ankit Metal may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Diligent Media

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Diligent Media are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite fairly unfluctuating fundamental indicators, Diligent Media demonstrated solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Ankit Metal and Diligent Media

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

The idea behind Ankit Metal Power and Diligent Media 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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.