Correlation Between Indian Metals and Capacite Infraprojects

Can any of the company-specific risk be diversified away by investing in both Indian Metals and Capacite Infraprojects 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 Indian Metals and Capacite Infraprojects into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Indian Metals Ferro and Capacite Infraprojects Limited, you can compare the effects of market volatilities on Indian Metals and Capacite Infraprojects 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 Indian Metals with a short position of Capacite Infraprojects. Check out your portfolio center. Please also check ongoing floating volatility patterns of Indian Metals and Capacite Infraprojects.

Diversification Opportunities for Indian Metals and Capacite Infraprojects

0.0

Correlation Coefficient

Indian Metals  Capacite Infraprojects

Pay attention - limited upside

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

Pair Corralation between Indian Metals and Capacite Infraprojects

If you would invest  0.00  in Capacite Infraprojects Limited on December 26, 2024 and sell it today you would earn a total of  0.00  from holding Capacite Infraprojects Limited or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	1.64%
Values	Daily Returns

Indian Metals Ferro  vs.  Capacite Infraprojects Limited

Indian Metals Ferro

Risk-Adjusted Performance

Very Weak

Over the last 90 days Indian Metals Ferro has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of inconsistent performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in April 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Capacite Infraprojects

Risk-Adjusted Performance

Very Weak

Over the last 90 days Capacite Infraprojects Limited has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable forward indicators, Capacite Infraprojects is not utilizing all of its potentials. The current stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Indian Metals and Capacite Infraprojects

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

The idea behind Indian Metals Ferro and Capacite Infraprojects 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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.