Correlation Between Gokul Refoils and Nahar Industrial

Can any of the company-specific risk be diversified away by investing in both Gokul Refoils and Nahar Industrial 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 Nahar Industrial 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 Nahar Industrial Enterprises, you can compare the effects of market volatilities on Gokul Refoils and Nahar Industrial 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 Nahar Industrial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gokul Refoils and Nahar Industrial.

Diversification Opportunities for Gokul Refoils and Nahar Industrial

0.43

Correlation Coefficient

Gokul Refoils  Nahar Industrial

Very weak diversification

The 3 months correlation between Gokul and Nahar is 0.43. Overlapping area represents the amount of risk that can be diversified away by holding Gokul Refoils and and Nahar Industrial Enterprises in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nahar Industrial Ent 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 Nahar Industrial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nahar Industrial Ent has no effect on the direction of Gokul Refoils i.e., Gokul Refoils and Nahar Industrial go up and down completely randomly.

Pair Corralation between Gokul Refoils and Nahar Industrial

Assuming the 90 days trading horizon Gokul Refoils and is expected to under-perform the Nahar Industrial. But the stock apears to be less risky and, when comparing its historical volatility, Gokul Refoils and is 1.43 times less risky than Nahar Industrial. The stock trades about -0.38 of its potential returns per unit of risk. The Nahar Industrial Enterprises is currently generating about -0.12 of returns per unit of risk over similar time horizon. If you would invest  13,798  in Nahar Industrial Enterprises on October 26, 2024 and sell it today you would lose (966.00) from holding Nahar Industrial Enterprises or give up 7.0% of portfolio value over 90 days.

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

Gokul Refoils and  vs.  Nahar Industrial Enterprises

Gokul Refoils

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Gokul Refoils and are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of very healthy forward-looking signals, Gokul Refoils is not utilizing all of its potentials. The newest stock price disarray, may contribute to short-term losses for the investors.

Nahar Industrial Ent

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Nahar Industrial Enterprises has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy fundamental indicators, Nahar Industrial is not utilizing all of its potentials. The newest stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with Gokul Refoils and Nahar Industrial

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

The idea behind Gokul Refoils and and Nahar Industrial Enterprises 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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.