Correlation Between Manaksia Coated and Gokul Refoils

Can any of the company-specific risk be diversified away by investing in both Manaksia Coated and Gokul Refoils 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 Gokul Refoils 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 Gokul Refoils and, you can compare the effects of market volatilities on Manaksia Coated and Gokul Refoils 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 Gokul Refoils. Check out your portfolio center. Please also check ongoing floating volatility patterns of Manaksia Coated and Gokul Refoils.

Diversification Opportunities for Manaksia Coated and Gokul Refoils

0.65

Correlation Coefficient

Manaksia Coated  Gokul Refoils

Poor diversification

The 3 months correlation between Manaksia and Gokul is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding Manaksia Coated Metals and Gokul Refoils and in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gokul Refoils 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 Gokul Refoils. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gokul Refoils has no effect on the direction of Manaksia Coated i.e., Manaksia Coated and Gokul Refoils go up and down completely randomly.

Pair Corralation between Manaksia Coated and Gokul Refoils

Assuming the 90 days trading horizon Manaksia Coated Metals is expected to generate 1.06 times more return on investment than Gokul Refoils. However, Manaksia Coated is 1.06 times more volatile than Gokul Refoils and. It trades about 0.27 of its potential returns per unit of risk. Gokul Refoils and is currently generating about 0.14 per unit of risk. If you would invest  6,924  in Manaksia Coated Metals on October 8, 2024 and sell it today you would earn a total of  4,393  from holding Manaksia Coated Metals or generate 63.45% return on investment over 90 days.

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

Manaksia Coated Metals  vs.  Gokul Refoils and

Manaksia Coated Metals

Risk-Adjusted Performance

21 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Manaksia Coated Metals are ranked lower than 21 (%) of all global equities and portfolios over the last 90 days. In spite of very conflicting basic indicators, Manaksia Coated displayed solid returns over the last few months and may actually be approaching a breakup point.

Gokul Refoils

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Gokul Refoils and are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. In spite of very unsteady forward-looking signals, Gokul Refoils displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Manaksia Coated and Gokul Refoils

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

The idea behind Manaksia Coated Metals and Gokul Refoils and 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.

Check out your portfolio center.

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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.