Correlation Between Gujarat Raffia and Shyam Metalics

Can any of the company-specific risk be diversified away by investing in both Gujarat Raffia 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 Gujarat Raffia and Shyam Metalics into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Gujarat Raffia Industries and Shyam Metalics and, you can compare the effects of market volatilities on Gujarat Raffia 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 Gujarat Raffia with a short position of Shyam Metalics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gujarat Raffia and Shyam Metalics.

Diversification Opportunities for Gujarat Raffia and Shyam Metalics

-0.21

Correlation Coefficient

Gujarat Raffia  Shyam Metalics

Very good diversification

The 3 months correlation between Gujarat and Shyam is -0.21. Overlapping area represents the amount of risk that can be diversified away by holding Gujarat Raffia Industries and Shyam Metalics and in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shyam Metalics and Gujarat Raffia 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 Gujarat Raffia Industries 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 Gujarat Raffia i.e., Gujarat Raffia and Shyam Metalics go up and down completely randomly.

Pair Corralation between Gujarat Raffia and Shyam Metalics

Assuming the 90 days trading horizon Gujarat Raffia Industries is expected to under-perform the Shyam Metalics. In addition to that, Gujarat Raffia is 1.16 times more volatile than Shyam Metalics and. It trades about -0.51 of its total potential returns per unit of risk. Shyam Metalics and is currently generating about 0.1 per unit of volatility. If you would invest  74,421  in Shyam Metalics and on December 27, 2024 and sell it today you would earn a total of  10,974  from holding Shyam Metalics and or generate 14.75% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	98.39%
Values	Daily Returns

Gujarat Raffia Industries  vs.  Shyam Metalics and

Gujarat Raffia Industries

Risk-Adjusted Performance

Very Weak

Over the last 90 days Gujarat Raffia Industries 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 technical and fundamental indicators remain nearly stable which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Shyam Metalics

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Shyam Metalics and are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of rather inconsistent technical and fundamental indicators, Shyam Metalics exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Gujarat Raffia and Shyam Metalics

The main advantage of trading using opposite Gujarat Raffia and Shyam Metalics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Gujarat Raffia 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 Gujarat Raffia Industries 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.

Check out your portfolio center.

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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.