Correlation Between Ankit Metal and Welspun Investments

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

Diversification Opportunities for Ankit Metal and Welspun Investments

-0.18

Correlation Coefficient

Ankit Metal  Welspun Investments

Good diversification

The 3 months correlation between Ankit and Welspun is -0.18. Overlapping area represents the amount of risk that can be diversified away by holding Ankit Metal Power and Welspun Investments and in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Welspun Investments and 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 Welspun Investments. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Welspun Investments and has no effect on the direction of Ankit Metal i.e., Ankit Metal and Welspun Investments go up and down completely randomly.

Pair Corralation between Ankit Metal and Welspun Investments

Assuming the 90 days trading horizon Ankit Metal is expected to generate 134.5 times less return on investment than Welspun Investments. But when comparing it to its historical volatility, Ankit Metal Power is 1.12 times less risky than Welspun Investments. It trades about 0.0 of its potential returns per unit of risk. Welspun Investments and is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest  31,095  in Welspun Investments and on September 26, 2024 and sell it today you would earn a total of  60,385  from holding Welspun Investments and or generate 194.2% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	95.71%
Values	Daily Returns

Ankit Metal Power  vs.  Welspun Investments and

Ankit Metal Power

Risk-Adjusted Performance

15 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Ankit Metal Power are ranked lower than 15 (%) 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.

Welspun Investments and

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Welspun Investments and has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong forward indicators, Welspun Investments is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Ankit Metal and Welspun Investments

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

The idea behind Ankit Metal Power and Welspun Investments and 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 Center module to all portfolio management and optimization tools to improve performance of your portfolios.