Correlation Between AXISCADES Technologies and Hindustan Copper

Can any of the company-specific risk be diversified away by investing in both AXISCADES Technologies and Hindustan Copper 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 AXISCADES Technologies and Hindustan Copper into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between AXISCADES Technologies Limited and Hindustan Copper Limited, you can compare the effects of market volatilities on AXISCADES Technologies and Hindustan Copper 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 AXISCADES Technologies with a short position of Hindustan Copper. Check out your portfolio center. Please also check ongoing floating volatility patterns of AXISCADES Technologies and Hindustan Copper.

Diversification Opportunities for AXISCADES Technologies and Hindustan Copper

-0.77

Correlation Coefficient

AXISCADES Technologies  Hindustan Copper

Pay attention - limited upside

The 3 months correlation between AXISCADES and Hindustan is -0.77. Overlapping area represents the amount of risk that can be diversified away by holding AXISCADES Technologies Limited and Hindustan Copper Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hindustan Copper and AXISCADES Technologies 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 AXISCADES Technologies Limited are associated (or correlated) with Hindustan Copper. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hindustan Copper has no effect on the direction of AXISCADES Technologies i.e., AXISCADES Technologies and Hindustan Copper go up and down completely randomly.

Pair Corralation between AXISCADES Technologies and Hindustan Copper

Assuming the 90 days trading horizon AXISCADES Technologies Limited is expected to generate 1.26 times more return on investment than Hindustan Copper. However, AXISCADES Technologies is 1.26 times more volatile than Hindustan Copper Limited. It trades about 0.08 of its potential returns per unit of risk. Hindustan Copper Limited is currently generating about -0.04 per unit of risk. If you would invest  77,655  in AXISCADES Technologies Limited on December 11, 2024 and sell it today you would earn a total of  8,340  from holding AXISCADES Technologies Limited or generate 10.74% return on investment over 90 days.

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

AXISCADES Technologies Limited  vs.  Hindustan Copper Limited

AXISCADES Technologies

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in AXISCADES Technologies Limited are ranked lower than 16 (%) of all global equities and portfolios over the last 90 days. In spite of rather uncertain fundamental indicators, AXISCADES Technologies exhibited solid returns over the last few months and may actually be approaching a breakup point.

Hindustan Copper

Risk-Adjusted Performance

Very Weak

Over the last 90 days Hindustan Copper Limited 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.

Pair Trading with AXISCADES Technologies and Hindustan Copper

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

The idea behind AXISCADES Technologies Limited and Hindustan Copper 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 Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.