Correlation Between Dhunseri Investments and Shaily Engineering

Can any of the company-specific risk be diversified away by investing in both Dhunseri Investments and Shaily Engineering 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 Dhunseri Investments and Shaily Engineering into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Dhunseri Investments Limited and Shaily Engineering Plastics, you can compare the effects of market volatilities on Dhunseri Investments and Shaily Engineering 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 Dhunseri Investments with a short position of Shaily Engineering. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dhunseri Investments and Shaily Engineering.

Diversification Opportunities for Dhunseri Investments and Shaily Engineering

-0.4

Correlation Coefficient

Dhunseri Investments  Shaily Engineering

Very good diversification

The 3 months correlation between Dhunseri and Shaily is -0.4. Overlapping area represents the amount of risk that can be diversified away by holding Dhunseri Investments Limited and Shaily Engineering Plastics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shaily Engineering and Dhunseri Investments 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 Dhunseri Investments Limited are associated (or correlated) with Shaily Engineering. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shaily Engineering has no effect on the direction of Dhunseri Investments i.e., Dhunseri Investments and Shaily Engineering go up and down completely randomly.

Pair Corralation between Dhunseri Investments and Shaily Engineering

Assuming the 90 days trading horizon Dhunseri Investments Limited is expected to under-perform the Shaily Engineering. In addition to that, Dhunseri Investments is 1.2 times more volatile than Shaily Engineering Plastics. It trades about -0.09 of its total potential returns per unit of risk. Shaily Engineering Plastics is currently generating about 0.12 per unit of volatility. If you would invest  149,950  in Shaily Engineering Plastics on December 25, 2024 and sell it today you would earn a total of  35,270  from holding Shaily Engineering Plastics or generate 23.52% return on investment over 90 days.

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

Dhunseri Investments Limited  vs.  Shaily Engineering Plastics

Dhunseri Investments

Risk-Adjusted Performance

Very Weak

Over the last 90 days Dhunseri Investments Limited has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of uncertain performance in the last few months, the Stock's forward indicators remain fairly stable which may send shares a bit higher in April 2025. The latest fuss may also be a sign of long-term up-swing for the venture sophisticated investors.

Shaily Engineering

Risk-Adjusted Performance

OK

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

Pair Trading with Dhunseri Investments and Shaily Engineering

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

The idea behind Dhunseri Investments Limited and Shaily Engineering Plastics 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.