Correlation Between Hilton Metal and Ganesh Housing

Can any of the company-specific risk be diversified away by investing in both Hilton Metal and Ganesh Housing 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 Hilton Metal and Ganesh Housing into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Hilton Metal Forging and Ganesh Housing, you can compare the effects of market volatilities on Hilton Metal and Ganesh Housing 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 Hilton Metal with a short position of Ganesh Housing. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hilton Metal and Ganesh Housing.

Diversification Opportunities for Hilton Metal and Ganesh Housing

0.48

Correlation Coefficient

Hilton Metal  Ganesh Housing

Very weak diversification

The 3 months correlation between Hilton and Ganesh is 0.48. Overlapping area represents the amount of risk that can be diversified away by holding Hilton Metal Forging and Ganesh Housing in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ganesh Housing and Hilton Metal 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 Hilton Metal Forging are associated (or correlated) with Ganesh Housing. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ganesh Housing has no effect on the direction of Hilton Metal i.e., Hilton Metal and Ganesh Housing go up and down completely randomly.

Pair Corralation between Hilton Metal and Ganesh Housing

Assuming the 90 days trading horizon Hilton Metal Forging is expected to generate 1.39 times more return on investment than Ganesh Housing. However, Hilton Metal is 1.39 times more volatile than Ganesh Housing. It trades about 0.32 of its potential returns per unit of risk. Ganesh Housing is currently generating about -0.03 per unit of risk. If you would invest  8,173  in Hilton Metal Forging on September 24, 2024 and sell it today you would earn a total of  1,577  from holding Hilton Metal Forging or generate 19.3% return on investment over 90 days.

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

Hilton Metal Forging  vs.  Ganesh Housing

Hilton Metal Forging

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Hilton Metal Forging are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite somewhat inconsistent basic indicators, Hilton Metal sustained solid returns over the last few months and may actually be approaching a breakup point.

Ganesh Housing

Risk-Adjusted Performance

14 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Ganesh Housing are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. Despite fairly unfluctuating basic indicators, Ganesh Housing demonstrated solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Hilton Metal and Ganesh Housing

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

The idea behind Hilton Metal Forging and Ganesh Housing 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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.