Correlation Between Gokul Refoils and Ratnamani Metals

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

Diversification Opportunities for Gokul Refoils and Ratnamani Metals

-0.52

Correlation Coefficient

Gokul Refoils  Ratnamani Metals

Excellent diversification

The 3 months correlation between Gokul and Ratnamani is -0.52. Overlapping area represents the amount of risk that can be diversified away by holding Gokul Refoils and and Ratnamani Metals Tubes in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ratnamani Metals Tubes 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 Ratnamani Metals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ratnamani Metals Tubes has no effect on the direction of Gokul Refoils i.e., Gokul Refoils and Ratnamani Metals go up and down completely randomly.

Pair Corralation between Gokul Refoils and Ratnamani Metals

Assuming the 90 days trading horizon Gokul Refoils and is expected to generate 1.81 times more return on investment than Ratnamani Metals. However, Gokul Refoils is 1.81 times more volatile than Ratnamani Metals Tubes. It trades about 0.14 of its potential returns per unit of risk. Ratnamani Metals Tubes is currently generating about -0.1 per unit of risk. If you would invest  5,189  in Gokul Refoils and on October 8, 2024 and sell it today you would earn a total of  1,293  from holding Gokul Refoils and or generate 24.92% return on investment over 90 days.

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

Gokul Refoils and  vs.  Ratnamani Metals Tubes

Gokul Refoils

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Gokul Refoils and are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. In spite of very unsteady forward-looking signals, Gokul Refoils displayed solid returns over the last few months and may actually be approaching a breakup point.

Ratnamani Metals Tubes

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Ratnamani Metals Tubes has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest uncertain performance, the Stock's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

Pair Trading with Gokul Refoils and Ratnamani Metals

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

The idea behind Gokul Refoils and and Ratnamani Metals Tubes 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 CEOs Directory module to screen CEOs from public companies around the world.