Correlation Between Manaksia Coated and Dhunseri Investments

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

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

Diversification Opportunities for Manaksia Coated and Dhunseri Investments

-0.09

Correlation Coefficient

Manaksia Coated  Dhunseri Investments

Good diversification

The 3 months correlation between Manaksia and Dhunseri is -0.09. Overlapping area represents the amount of risk that can be diversified away by holding Manaksia Coated Metals and Dhunseri Investments Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dhunseri Investments and Manaksia Coated 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 Manaksia Coated Metals are associated (or correlated) with Dhunseri Investments. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dhunseri Investments has no effect on the direction of Manaksia Coated i.e., Manaksia Coated and Dhunseri Investments go up and down completely randomly.

Pair Corralation between Manaksia Coated and Dhunseri Investments

Assuming the 90 days trading horizon Manaksia Coated Metals is expected to generate 0.96 times more return on investment than Dhunseri Investments. However, Manaksia Coated Metals is 1.04 times less risky than Dhunseri Investments. It trades about 0.24 of its potential returns per unit of risk. Dhunseri Investments Limited is currently generating about -0.03 per unit of risk. If you would invest  6,780  in Manaksia Coated Metals on September 21, 2024 and sell it today you would earn a total of  3,720  from holding Manaksia Coated Metals or generate 54.87% return on investment over 90 days.

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

Manaksia Coated Metals  vs.  Dhunseri Investments Limited

Manaksia Coated Metals

Risk-Adjusted Performance

18 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Manaksia Coated Metals are ranked lower than 18 (%) of all global equities and portfolios over the last 90 days. In spite of very uncertain basic indicators, Manaksia Coated displayed solid returns over the last few months and may actually be approaching a breakup point.

Dhunseri Investments

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Dhunseri Investments Limited has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest unsteady performance, the Stock's forward indicators remain stable and the latest fuss on Wall Street may also be a sign of long-term gains for the venture sophisticated investors.

Pair Trading with Manaksia Coated and Dhunseri Investments

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

The idea behind Manaksia Coated Metals and Dhunseri Investments 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 CEOs Directory module to screen CEOs from public companies around the world.