Correlation Between Gokul Refoils and Shyam Metalics

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

Diversification Opportunities for Gokul Refoils and Shyam Metalics

-0.54

Correlation Coefficient

Gokul Refoils  Shyam Metalics

Excellent diversification

The 3 months correlation between Gokul and Shyam is -0.54. Overlapping area represents the amount of risk that can be diversified away by holding Gokul Refoils and and Shyam Metalics and in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shyam Metalics 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 Shyam Metalics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shyam Metalics has no effect on the direction of Gokul Refoils i.e., Gokul Refoils and Shyam Metalics go up and down completely randomly.

Pair Corralation between Gokul Refoils and Shyam Metalics

Assuming the 90 days trading horizon Gokul Refoils and is expected to generate 1.52 times more return on investment than Shyam Metalics. However, Gokul Refoils is 1.52 times more volatile than Shyam Metalics and. It trades about 0.12 of its potential returns per unit of risk. Shyam Metalics and is currently generating about -0.14 per unit of risk. If you would invest  5,139  in Gokul Refoils and on September 30, 2024 and sell it today you would earn a total of  1,113  from holding Gokul Refoils and or generate 21.66% 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.  Shyam Metalics and

Gokul Refoils

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Gokul Refoils and are ranked lower than 9 (%) 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.

Shyam Metalics

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Shyam Metalics and 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 technical and fundamental indicators remain rather sound which may send shares a bit higher in January 2025. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

Pair Trading with Gokul Refoils and Shyam Metalics

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

The idea behind Gokul Refoils and and Shyam Metalics and 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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.