Correlation Between Hisar Metal and Metalyst Forgings

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

By analyzing existing cross correlation between Hisar Metal Industries and Metalyst Forgings Limited, you can compare the effects of market volatilities on Hisar Metal and Metalyst Forgings 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 Hisar Metal with a short position of Metalyst Forgings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hisar Metal and Metalyst Forgings.

Diversification Opportunities for Hisar Metal and Metalyst Forgings

0.0

Correlation Coefficient

Hisar Metal  Metalyst Forgings

Pay attention - limited upside

The 3 months correlation between Hisar and Metalyst is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Hisar Metal Industries and Metalyst Forgings Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Metalyst Forgings and Hisar 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 Hisar Metal Industries are associated (or correlated) with Metalyst Forgings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Metalyst Forgings has no effect on the direction of Hisar Metal i.e., Hisar Metal and Metalyst Forgings go up and down completely randomly.

Pair Corralation between Hisar Metal and Metalyst Forgings

If you would invest  405.00  in Metalyst Forgings Limited on September 2, 2024 and sell it today you would earn a total of  0.00  from holding Metalyst Forgings Limited or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	98.44%
Values	Daily Returns

Hisar Metal Industries  vs.  Metalyst Forgings Limited

Hisar Metal Industries

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Hisar Metal Industries has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest uncertain performance, the Stock's basic indicators remain sound and the latest tumult on Wall Street may also be a sign of longer-term gains for the firm shareholders.

Metalyst Forgings

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Metalyst Forgings Limited has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy basic indicators, Metalyst Forgings is not utilizing all of its potentials. The latest stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with Hisar Metal and Metalyst Forgings

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

The idea behind Hisar Metal Industries and Metalyst Forgings 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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.