Correlation Between Maithan Alloys and Shree Pushkar

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

By analyzing existing cross correlation between Maithan Alloys Limited and Shree Pushkar Chemicals, you can compare the effects of market volatilities on Maithan Alloys and Shree Pushkar 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 Maithan Alloys with a short position of Shree Pushkar. Check out your portfolio center. Please also check ongoing floating volatility patterns of Maithan Alloys and Shree Pushkar.

Diversification Opportunities for Maithan Alloys and Shree Pushkar

0.29

Correlation Coefficient

Maithan Alloys  Shree Pushkar

Modest diversification

The 3 months correlation between Maithan and Shree is 0.29. Overlapping area represents the amount of risk that can be diversified away by holding Maithan Alloys Limited and Shree Pushkar Chemicals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shree Pushkar Chemicals and Maithan Alloys 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 Maithan Alloys Limited are associated (or correlated) with Shree Pushkar. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shree Pushkar Chemicals has no effect on the direction of Maithan Alloys i.e., Maithan Alloys and Shree Pushkar go up and down completely randomly.

Pair Corralation between Maithan Alloys and Shree Pushkar

Assuming the 90 days trading horizon Maithan Alloys Limited is expected to under-perform the Shree Pushkar. But the stock apears to be less risky and, when comparing its historical volatility, Maithan Alloys Limited is 1.69 times less risky than Shree Pushkar. The stock trades about -0.14 of its potential returns per unit of risk. The Shree Pushkar Chemicals is currently generating about -0.06 of returns per unit of risk over similar time horizon. If you would invest  32,605  in Shree Pushkar Chemicals on December 29, 2024 and sell it today you would lose (5,975) from holding Shree Pushkar Chemicals or give up 18.33% of portfolio value over 90 days.

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

Maithan Alloys Limited  vs.  Shree Pushkar Chemicals

Maithan Alloys

Risk-Adjusted Performance

Very Weak

Over the last 90 days Maithan Alloys Limited has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Stock's basic indicators remain very healthy which may send shares a bit higher in April 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

Shree Pushkar Chemicals

Risk-Adjusted Performance

Very Weak

Over the last 90 days Shree Pushkar Chemicals has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of uncertain 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.

Pair Trading with Maithan Alloys and Shree Pushkar

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

The idea behind Maithan Alloys Limited and Shree Pushkar Chemicals 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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.