Correlation Between Mahamaya Steel and Aptech

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

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

Diversification Opportunities for Mahamaya Steel and Aptech

-0.87

Correlation Coefficient

Mahamaya Steel  Aptech

Pay attention - limited upside

The 3 months correlation between Mahamaya and Aptech is -0.87. Overlapping area represents the amount of risk that can be diversified away by holding Mahamaya Steel Industries and Aptech Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aptech Limited and Mahamaya Steel 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 Mahamaya Steel Industries are associated (or correlated) with Aptech. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aptech Limited has no effect on the direction of Mahamaya Steel i.e., Mahamaya Steel and Aptech go up and down completely randomly.

Pair Corralation between Mahamaya Steel and Aptech

Assuming the 90 days trading horizon Mahamaya Steel Industries is expected to generate 0.61 times more return on investment than Aptech. However, Mahamaya Steel Industries is 1.63 times less risky than Aptech. It trades about 0.22 of its potential returns per unit of risk. Aptech Limited is currently generating about -0.14 per unit of risk. If you would invest  19,657  in Mahamaya Steel Industries on December 28, 2024 and sell it today you would earn a total of  6,747  from holding Mahamaya Steel Industries or generate 34.32% return on investment over 90 days.

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

Mahamaya Steel Industries  vs.  Aptech Limited

Mahamaya Steel Industries

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Mahamaya Steel Industries are ranked lower than 17 (%) of all global equities and portfolios over the last 90 days. In spite of rather weak technical and fundamental indicators, Mahamaya Steel exhibited solid returns over the last few months and may actually be approaching a breakup point.

Aptech Limited

Risk-Adjusted Performance

Very Weak

Over the last 90 days Aptech Limited has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unsteady performance in the last few months, the Stock's fundamental 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.

Pair Trading with Mahamaya Steel and Aptech

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

The idea behind Mahamaya Steel Industries and Aptech 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 Portfolio Anywhere module to track or share privately all of your investments from the convenience of any device.