Correlation Between Cirmaker Technology and Altech Batteries

Can any of the company-specific risk be diversified away by investing in both Cirmaker Technology and Altech Batteries 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 Cirmaker Technology and Altech Batteries into the same portfolio, which is an essential part of the fundamental portfolio management process.

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

Diversification Opportunities for Cirmaker Technology and Altech Batteries

-0.2

Correlation Coefficient

Cirmaker Technology  Altech Batteries

Good diversification

The 3 months correlation between Cirmaker and Altech is -0.2. Overlapping area represents the amount of risk that can be diversified away by holding Cirmaker Technology and Altech Batteries Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Altech Batteries and Cirmaker Technology 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 Cirmaker Technology are associated (or correlated) with Altech Batteries. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Altech Batteries has no effect on the direction of Cirmaker Technology i.e., Cirmaker Technology and Altech Batteries go up and down completely randomly.

Pair Corralation between Cirmaker Technology and Altech Batteries

Given the investment horizon of 90 days Cirmaker Technology is expected to generate 1.21 times more return on investment than Altech Batteries. However, Cirmaker Technology is 1.21 times more volatile than Altech Batteries Limited. It trades about 0.12 of its potential returns per unit of risk. Altech Batteries Limited is currently generating about 0.04 per unit of risk. If you would invest  4.50  in Cirmaker Technology on December 20, 2024 and sell it today you would earn a total of  2.95  from holding Cirmaker Technology or generate 65.56% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	96.77%
Values	Daily Returns

Cirmaker Technology  vs.  Altech Batteries Limited

Cirmaker Technology

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Cirmaker Technology are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively weak forward-looking signals, Cirmaker Technology unveiled solid returns over the last few months and may actually be approaching a breakup point.

Altech Batteries

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Altech Batteries Limited are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite nearly uncertain technical indicators, Altech Batteries reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Cirmaker Technology and Altech Batteries

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

The idea behind Cirmaker Technology and Altech Batteries 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 Global Correlations module to find global opportunities by holding instruments from different markets.