Correlation Between Aisha Steel and Invest Capital

Can any of the company-specific risk be diversified away by investing in both Aisha Steel and Invest Capital 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 Aisha Steel and Invest Capital into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Aisha Steel Mills and Invest Capital Investment, you can compare the effects of market volatilities on Aisha Steel and Invest Capital 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 Aisha Steel with a short position of Invest Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aisha Steel and Invest Capital.

Diversification Opportunities for Aisha Steel and Invest Capital

0.73

Correlation Coefficient

Aisha Steel  Invest Capital

Poor diversification

The 3 months correlation between Aisha and Invest is 0.73. Overlapping area represents the amount of risk that can be diversified away by holding Aisha Steel Mills and Invest Capital Investment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Invest Capital Investment and Aisha Steel 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 Aisha Steel Mills are associated (or correlated) with Invest Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Invest Capital Investment has no effect on the direction of Aisha Steel i.e., Aisha Steel and Invest Capital go up and down completely randomly.

Pair Corralation between Aisha Steel and Invest Capital

Assuming the 90 days trading horizon Aisha Steel Mills is expected to under-perform the Invest Capital. But the stock apears to be less risky and, when comparing its historical volatility, Aisha Steel Mills is 1.08 times less risky than Invest Capital. The stock trades about -0.12 of its potential returns per unit of risk. The Invest Capital Investment is currently generating about -0.06 of returns per unit of risk over similar time horizon. If you would invest  160.00  in Invest Capital Investment on December 30, 2024 and sell it today you would lose (20.00) from holding Invest Capital Investment or give up 12.5% of portfolio value over 90 days.

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

Aisha Steel Mills  vs.  Invest Capital Investment

Aisha Steel Mills

Risk-Adjusted Performance

Very Weak

Over the last 90 days Aisha Steel Mills has generated negative risk-adjusted returns adding no value to investors with long positions. Even with weak performance in the last few months, the Stock's basic indicators remain relatively invariable which may send shares a bit higher in April 2025. The latest agitation may also be a sign of long-running up-swing for the enterprise retail investors.

Invest Capital Investment

Risk-Adjusted Performance

Very Weak

Over the last 90 days Invest Capital Investment has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest weak performance, the Stock's forward indicators remain persistent and the latest mess on Wall Street may also be a sign of long-standing gains for the company institutional investors.

Pair Trading with Aisha Steel and Invest Capital

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

The idea behind Aisha Steel Mills and Invest Capital Investment 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 Portfolio Dashboard module to portfolio dashboard that provides centralized access to all your investments.