Correlation Between Manaksia Coated and SIS

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

Diversification Opportunities for Manaksia Coated and SIS

0.72

Correlation Coefficient

Manaksia Coated  SIS

Poor diversification

The 3 months correlation between Manaksia and SIS is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding Manaksia Coated Metals and SIS LIMITED in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SIS LIMITED 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 SIS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SIS LIMITED has no effect on the direction of Manaksia Coated i.e., Manaksia Coated and SIS go up and down completely randomly.

Pair Corralation between Manaksia Coated and SIS

Assuming the 90 days trading horizon Manaksia Coated Metals is expected to under-perform the SIS. In addition to that, Manaksia Coated is 1.05 times more volatile than SIS LIMITED. It trades about -0.15 of its total potential returns per unit of risk. SIS LIMITED is currently generating about -0.04 per unit of volatility. If you would invest  37,005  in SIS LIMITED on December 25, 2024 and sell it today you would lose (3,090) from holding SIS LIMITED or give up 8.35% of portfolio value over 90 days.

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

Manaksia Coated Metals  vs.  SIS LIMITED

Manaksia Coated Metals

Risk-Adjusted Performance

Very Weak

Over the last 90 days Manaksia Coated Metals has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of inconsistent 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.

SIS LIMITED

Risk-Adjusted Performance

Very Weak

Over the last 90 days SIS LIMITED has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest weak performance, the Stock's technical and fundamental indicators remain sound and the latest tumult on Wall Street may also be a sign of longer-term gains for the firm shareholders.

Pair Trading with Manaksia Coated and SIS

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

The idea behind Manaksia Coated Metals and SIS 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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.