Correlation Between IdeaForge Technology and Mahamaya Steel

Can any of the company-specific risk be diversified away by investing in both IdeaForge Technology and Mahamaya Steel 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 IdeaForge Technology and Mahamaya Steel into the same portfolio, which is an essential part of the fundamental portfolio management process.

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

Diversification Opportunities for IdeaForge Technology and Mahamaya Steel

-0.54

Correlation Coefficient

IdeaForge Technology  Mahamaya Steel

Excellent diversification

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

Pair Corralation between IdeaForge Technology and Mahamaya Steel

Assuming the 90 days trading horizon ideaForge Technology Limited is expected to under-perform the Mahamaya Steel. In addition to that, IdeaForge Technology is 1.1 times more volatile than Mahamaya Steel Industries. It trades about -0.46 of its total potential returns per unit of risk. Mahamaya Steel Industries is currently generating about 0.16 per unit of volatility. If you would invest  20,567  in Mahamaya Steel Industries on December 2, 2024 and sell it today you would earn a total of  3,333  from holding Mahamaya Steel Industries or generate 16.21% return on investment over 90 days.

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

ideaForge Technology Limited  vs.  Mahamaya Steel Industries

ideaForge Technology

Risk-Adjusted Performance

Very Weak

Over the last 90 days ideaForge Technology Limited has generated negative risk-adjusted returns adding no value to investors with long positions. Even with unsteady performance in the last few months, the Stock's basic indicators remain relatively invariable which may send shares a bit higher in April 2025. The latest agitation may also be a sign of long-running up-swing for the enterprise retail investors.

Mahamaya Steel Industries

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Mahamaya Steel Industries are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of rather weak technical and fundamental indicators, Mahamaya Steel may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with IdeaForge Technology and Mahamaya Steel

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

The idea behind ideaForge Technology Limited and Mahamaya Steel Industries 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 Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.