Correlation Between Ankit Metal and TATA SUMER

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

Diversification Opportunities for Ankit Metal and TATA SUMER

-0.47

Correlation Coefficient

Ankit Metal  TATA SUMER

Very good diversification

The 3 months correlation between Ankit and TATA is -0.47. Overlapping area represents the amount of risk that can be diversified away by holding Ankit Metal Power and TATA SUMER PRODUCTS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TATA SUMER PRODUCTS 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 TATA SUMER. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TATA SUMER PRODUCTS has no effect on the direction of Ankit Metal i.e., Ankit Metal and TATA SUMER go up and down completely randomly.

Pair Corralation between Ankit Metal and TATA SUMER

Assuming the 90 days trading horizon Ankit Metal Power is expected to generate 1.83 times more return on investment than TATA SUMER. However, Ankit Metal is 1.83 times more volatile than TATA SUMER PRODUCTS. It trades about 0.13 of its potential returns per unit of risk. TATA SUMER PRODUCTS is currently generating about -0.14 per unit of risk. If you would invest  355.00  in Ankit Metal Power on October 10, 2024 and sell it today you would earn a total of  83.00  from holding Ankit Metal Power or generate 23.38% return on investment over 90 days.

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

Ankit Metal Power  vs.  TATA SUMER PRODUCTS

Ankit Metal Power

Risk-Adjusted Performance

10 of 100

OK

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.

TATA SUMER PRODUCTS

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days TATA SUMER PRODUCTS 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 very healthy which may send shares a bit higher in February 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

Pair Trading with Ankit Metal and TATA SUMER

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

The idea behind Ankit Metal Power and TATA SUMER PRODUCTS 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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.