Correlation Between Crescent Steel and Data Agro

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

By analyzing existing cross correlation between Crescent Steel Allied and Data Agro, you can compare the effects of market volatilities on Crescent Steel and Data Agro 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 Crescent Steel with a short position of Data Agro. Check out your portfolio center. Please also check ongoing floating volatility patterns of Crescent Steel and Data Agro.

Diversification Opportunities for Crescent Steel and Data Agro

-0.2

Correlation Coefficient

Crescent Steel  Data Agro

Good diversification

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

Pair Corralation between Crescent Steel and Data Agro

Assuming the 90 days trading horizon Crescent Steel Allied is expected to generate 0.99 times more return on investment than Data Agro. However, Crescent Steel Allied is 1.01 times less risky than Data Agro. It trades about 0.04 of its potential returns per unit of risk. Data Agro is currently generating about -0.02 per unit of risk. If you would invest  10,331  in Crescent Steel Allied on October 25, 2024 and sell it today you would earn a total of  163.00  from holding Crescent Steel Allied or generate 1.58% return on investment over 90 days.

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

Crescent Steel Allied  vs.  Data Agro

Crescent Steel Allied

Risk-Adjusted Performance

0 of 100

Very Weak

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

Data Agro

Risk-Adjusted Performance

9 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Data Agro are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Despite somewhat conflicting basic indicators, Data Agro sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Crescent Steel and Data Agro

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

The idea behind Crescent Steel Allied and Data Agro 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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.