Correlation Between Gokul Refoils and Indian Metals

Can any of the company-specific risk be diversified away by investing in both Gokul Refoils and Indian Metals 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 Gokul Refoils and Indian Metals into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Gokul Refoils and and Indian Metals Ferro, you can compare the effects of market volatilities on Gokul Refoils and Indian Metals 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 Gokul Refoils with a short position of Indian Metals. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gokul Refoils and Indian Metals.

Diversification Opportunities for Gokul Refoils and Indian Metals

0.92

Correlation Coefficient

Gokul Refoils  Indian Metals

Almost no diversification

The 3 months correlation between Gokul and Indian is 0.92. Overlapping area represents the amount of risk that can be diversified away by holding Gokul Refoils and and Indian Metals Ferro in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Indian Metals Ferro and Gokul Refoils 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 Gokul Refoils and are associated (or correlated) with Indian Metals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Indian Metals Ferro has no effect on the direction of Gokul Refoils i.e., Gokul Refoils and Indian Metals go up and down completely randomly.

Pair Corralation between Gokul Refoils and Indian Metals

Assuming the 90 days trading horizon Gokul Refoils and is expected to generate 0.87 times more return on investment than Indian Metals. However, Gokul Refoils and is 1.15 times less risky than Indian Metals. It trades about -0.15 of its potential returns per unit of risk. Indian Metals Ferro is currently generating about -0.13 per unit of risk. If you would invest  6,301  in Gokul Refoils and on December 24, 2024 and sell it today you would lose (1,457) from holding Gokul Refoils and or give up 23.12% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Strong
Accuracy	98.39%
Values	Daily Returns

Gokul Refoils and  vs.  Indian Metals Ferro

Gokul Refoils

Risk-Adjusted Performance

Very Weak

Over the last 90 days Gokul Refoils and has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Stock's forward-looking signals remain very healthy which may send shares a bit higher in April 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

Indian Metals Ferro

Risk-Adjusted Performance

Very Weak

Over the last 90 days Indian Metals Ferro has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of inconsistent performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in April 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Pair Trading with Gokul Refoils and Indian Metals

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

The idea behind Gokul Refoils and and Indian Metals Ferro 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 Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.