Correlation Between Indraprastha Medical and Geojit Financial

Can any of the company-specific risk be diversified away by investing in both Indraprastha Medical and Geojit Financial 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 Indraprastha Medical and Geojit Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Indraprastha Medical and Geojit Financial Services, you can compare the effects of market volatilities on Indraprastha Medical and Geojit Financial 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 Indraprastha Medical with a short position of Geojit Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Indraprastha Medical and Geojit Financial.

Diversification Opportunities for Indraprastha Medical and Geojit Financial

0.52

Correlation Coefficient

Indraprastha Medical  Geojit Financial

Very weak diversification

The 3 months correlation between Indraprastha and Geojit is 0.52. Overlapping area represents the amount of risk that can be diversified away by holding Indraprastha Medical and Geojit Financial Services in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Geojit Financial Services and Indraprastha Medical 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 Indraprastha Medical are associated (or correlated) with Geojit Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Geojit Financial Services has no effect on the direction of Indraprastha Medical i.e., Indraprastha Medical and Geojit Financial go up and down completely randomly.

Pair Corralation between Indraprastha Medical and Geojit Financial

Assuming the 90 days trading horizon Indraprastha Medical is expected to generate 0.69 times more return on investment than Geojit Financial. However, Indraprastha Medical is 1.44 times less risky than Geojit Financial. It trades about 0.05 of its potential returns per unit of risk. Geojit Financial Services is currently generating about -0.08 per unit of risk. If you would invest  43,435  in Indraprastha Medical on September 3, 2024 and sell it today you would earn a total of  2,540  from holding Indraprastha Medical or generate 5.85% return on investment over 90 days.

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

Indraprastha Medical  vs.  Geojit Financial Services

Indraprastha Medical

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Indraprastha Medical are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of rather uncertain fundamental indicators, Indraprastha Medical may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Geojit Financial Services

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Geojit Financial Services 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 January 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Pair Trading with Indraprastha Medical and Geojit Financial

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

The idea behind Indraprastha Medical and Geojit Financial Services 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 Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.