Correlation Between Ankit Metal and S P

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

Diversification Opportunities for Ankit Metal and S P

0.38

Correlation Coefficient

Ankit Metal  S P

Weak diversification

The 3 months correlation between Ankit and SPAL is 0.38. Overlapping area represents the amount of risk that can be diversified away by holding Ankit Metal Power and S P Apparels in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on S P Apparels 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 S P. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of S P Apparels has no effect on the direction of Ankit Metal i.e., Ankit Metal and S P go up and down completely randomly.

Pair Corralation between Ankit Metal and S P

Assuming the 90 days trading horizon Ankit Metal Power is expected to under-perform the S P. But the stock apears to be less risky and, when comparing its historical volatility, Ankit Metal Power is 1.23 times less risky than S P. The stock trades about -0.49 of its potential returns per unit of risk. The S P Apparels is currently generating about -0.13 of returns per unit of risk over similar time horizon. If you would invest  92,935  in S P Apparels on October 26, 2024 and sell it today you would lose (6,670) from holding S P Apparels or give up 7.18% of portfolio value over 90 days.

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

Ankit Metal Power  vs.  S P Apparels

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 weak basic indicators, Ankit Metal may actually be approaching a critical reversion point that can send shares even higher in February 2025.

S P Apparels

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days S P Apparels has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, S P is not utilizing all of its potentials. The current stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Ankit Metal and S P

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

The idea behind Ankit Metal Power and S P Apparels 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.

Check out your portfolio center.

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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.