Correlation Between Manaksia Steels and Jindal Poly

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

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

Diversification Opportunities for Manaksia Steels and Jindal Poly

-0.65

Correlation Coefficient

Manaksia Steels  Jindal Poly

Excellent diversification

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

Pair Corralation between Manaksia Steels and Jindal Poly

Assuming the 90 days trading horizon Manaksia Steels is expected to generate 1.99 times less return on investment than Jindal Poly. In addition to that, Manaksia Steels is 1.15 times more volatile than Jindal Poly Investment. It trades about 0.02 of its total potential returns per unit of risk. Jindal Poly Investment is currently generating about 0.05 per unit of volatility. If you would invest  62,950  in Jindal Poly Investment on October 9, 2024 and sell it today you would earn a total of  20,465  from holding Jindal Poly Investment or generate 32.51% return on investment over 90 days.

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

Manaksia Steels Limited  vs.  Jindal Poly Investment

Manaksia Steels

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Manaksia Steels Limited has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest uncertain performance, the Stock's technical and fundamental indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the firm private investors.

Jindal Poly Investment

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Jindal Poly Investment are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of very inconsistent basic indicators, Jindal Poly may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Pair Trading with Manaksia Steels and Jindal Poly

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

The idea behind Manaksia Steels Limited and Jindal Poly Investment 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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.