Correlation Between Ankit Metal and Shyam Telecom

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

Diversification Opportunities for Ankit Metal and Shyam Telecom

0.85

Correlation Coefficient

Ankit Metal  Shyam Telecom

Very poor diversification

The 3 months correlation between Ankit and Shyam is 0.85. Overlapping area represents the amount of risk that can be diversified away by holding Ankit Metal Power and Shyam Telecom Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shyam Telecom Limited 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 Shyam Telecom. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shyam Telecom Limited has no effect on the direction of Ankit Metal i.e., Ankit Metal and Shyam Telecom go up and down completely randomly.

Pair Corralation between Ankit Metal and Shyam Telecom

Assuming the 90 days trading horizon Ankit Metal Power is expected to under-perform the Shyam Telecom. But the stock apears to be less risky and, when comparing its historical volatility, Ankit Metal Power is 1.03 times less risky than Shyam Telecom. The stock trades about -0.32 of its potential returns per unit of risk. The Shyam Telecom Limited is currently generating about -0.2 of returns per unit of risk over similar time horizon. If you would invest  2,160  in Shyam Telecom Limited on December 26, 2024 and sell it today you would lose (810.00) from holding Shyam Telecom Limited or give up 37.5% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Strong
Accuracy	98.39%
Values	Daily Returns

Ankit Metal Power  vs.  Shyam Telecom Limited

Ankit Metal Power

Risk-Adjusted Performance

Very Weak

Over the last 90 days Ankit Metal Power has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of uncertain performance in the last few months, the Stock's basic indicators remain rather sound which may send shares a bit higher in April 2025. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

Shyam Telecom Limited

Risk-Adjusted Performance

Very Weak

Over the last 90 days Shyam Telecom Limited has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of uncertain performance in the last few months, the Stock's basic indicators remain rather sound which may send shares a bit higher in April 2025. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

Pair Trading with Ankit Metal and Shyam Telecom

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

The idea behind Ankit Metal Power and Shyam Telecom 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 Equity Valuation module to check real value of public entities based on technical and fundamental data.