Correlation Between Ankit Metal and Mtar Technologies

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

Diversification Opportunities for Ankit Metal and Mtar Technologies

-0.26

Correlation Coefficient

Ankit Metal  Mtar Technologies

Very good diversification

The 3 months correlation between Ankit and Mtar is -0.26. Overlapping area represents the amount of risk that can be diversified away by holding Ankit Metal Power and Mtar Technologies Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mtar Technologies 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 Mtar Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mtar Technologies has no effect on the direction of Ankit Metal i.e., Ankit Metal and Mtar Technologies go up and down completely randomly.

Pair Corralation between Ankit Metal and Mtar Technologies

Assuming the 90 days trading horizon Ankit Metal Power is expected to generate 1.07 times more return on investment than Mtar Technologies. However, Ankit Metal is 1.07 times more volatile than Mtar Technologies Limited. It trades about 0.29 of its potential returns per unit of risk. Mtar Technologies Limited is currently generating about 0.0 per unit of risk. If you would invest  370.00  in Ankit Metal Power on October 9, 2024 and sell it today you would earn a total of  68.00  from holding Ankit Metal Power or generate 18.38% return on investment over 90 days.

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

Ankit Metal Power  vs.  Mtar Technologies Limited

Ankit Metal Power

Risk-Adjusted Performance

10 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Ankit Metal Power are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. In spite of rather uncertain basic indicators, Ankit Metal exhibited solid returns over the last few months and may actually be approaching a breakup point.

Mtar Technologies

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Mtar Technologies Limited has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound technical and fundamental indicators, Mtar Technologies is not utilizing all of its potentials. The newest stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with Ankit Metal and Mtar Technologies

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

The idea behind Ankit Metal Power and Mtar Technologies Limited 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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.