Correlation Between G Tec and Maharashtra Scooters

Can any of the company-specific risk be diversified away by investing in both G Tec and Maharashtra Scooters 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 G Tec and Maharashtra Scooters into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between G Tec Jainx Education and Maharashtra Scooters Limited, you can compare the effects of market volatilities on G Tec and Maharashtra Scooters 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 G Tec with a short position of Maharashtra Scooters. Check out your portfolio center. Please also check ongoing floating volatility patterns of G Tec and Maharashtra Scooters.

Diversification Opportunities for G Tec and Maharashtra Scooters

0.82

Correlation Coefficient

G Tec  Maharashtra Scooters

Very poor diversification

The 3 months correlation between GTECJAINX and Maharashtra is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding G Tec Jainx Education and Maharashtra Scooters Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Maharashtra Scooters and G Tec 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 G Tec Jainx Education are associated (or correlated) with Maharashtra Scooters. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Maharashtra Scooters has no effect on the direction of G Tec i.e., G Tec and Maharashtra Scooters go up and down completely randomly.

Pair Corralation between G Tec and Maharashtra Scooters

Assuming the 90 days trading horizon G Tec is expected to generate 2.93 times less return on investment than Maharashtra Scooters. In addition to that, G Tec is 2.03 times more volatile than Maharashtra Scooters Limited. It trades about 0.02 of its total potential returns per unit of risk. Maharashtra Scooters Limited is currently generating about 0.1 per unit of volatility. If you would invest  428,192  in Maharashtra Scooters Limited on October 11, 2024 and sell it today you would earn a total of  531,778  from holding Maharashtra Scooters Limited or generate 124.19% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Strong
Accuracy	80.82%
Values	Daily Returns

G Tec Jainx Education  vs.  Maharashtra Scooters Limited

G Tec Jainx

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days G Tec Jainx Education has generated negative risk-adjusted returns adding no value to investors with long positions. Despite uncertain performance in the last few months, the Stock's forward indicators remain fairly strong which may send shares a bit higher in February 2025. The recent confusion may also be a sign of long-lasting up-swing for the firm traders.

Maharashtra Scooters

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Maharashtra Scooters Limited has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unsteady performance in the last few months, the Stock's basic indicators remain very healthy which may send shares a bit higher in February 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

Pair Trading with G Tec and Maharashtra Scooters

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

The idea behind G Tec Jainx Education and Maharashtra Scooters Limited 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 Equity Valuation module to check real value of public entities based on technical and fundamental data.