Correlation Between Ankit Metal and Max Financial

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

Diversification Opportunities for Ankit Metal and Max Financial

-0.58

Correlation Coefficient

Ankit Metal  Max Financial

Excellent diversification

The 3 months correlation between Ankit and Max is -0.58. Overlapping area represents the amount of risk that can be diversified away by holding Ankit Metal Power and Max Financial Services in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Max Financial Services 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 Max Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Max Financial Services has no effect on the direction of Ankit Metal i.e., Ankit Metal and Max Financial go up and down completely randomly.

Pair Corralation between Ankit Metal and Max Financial

Assuming the 90 days trading horizon Ankit Metal Power is expected to under-perform the Max Financial. In addition to that, Ankit Metal is 1.53 times more volatile than Max Financial Services. It trades about -0.5 of its total potential returns per unit of risk. Max Financial Services is currently generating about -0.08 per unit of volatility. If you would invest  110,070  in Max Financial Services on October 23, 2024 and sell it today you would lose (2,485) from holding Max Financial Services or give up 2.26% of portfolio value over 90 days.

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

Ankit Metal Power  vs.  Max Financial Services

Ankit Metal Power

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Ankit Metal Power are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of rather sound basic indicators, Ankit Metal is not utilizing all of its potentials. The current stock price tumult, may contribute to shorter-term losses for the shareholders.

Max Financial Services

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with Ankit Metal and Max Financial

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

The idea behind Ankit Metal Power and Max Financial Services 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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..