Correlation Between Man Infraconstructio and Hindware Home

Can any of the company-specific risk be diversified away by investing in both Man Infraconstructio and Hindware Home 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 Man Infraconstructio and Hindware Home into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Man Infraconstruction Limited and Hindware Home Innovation, you can compare the effects of market volatilities on Man Infraconstructio and Hindware Home 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 Man Infraconstructio with a short position of Hindware Home. Check out your portfolio center. Please also check ongoing floating volatility patterns of Man Infraconstructio and Hindware Home.

Diversification Opportunities for Man Infraconstructio and Hindware Home

-0.17

Correlation Coefficient

Man Infraconstructio  Hindware Home

Good diversification

The 3 months correlation between Man and Hindware is -0.17. Overlapping area represents the amount of risk that can be diversified away by holding Man Infraconstruction Limited and Hindware Home Innovation in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hindware Home Innovation and Man Infraconstructio 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 Man Infraconstruction Limited are associated (or correlated) with Hindware Home. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hindware Home Innovation has no effect on the direction of Man Infraconstructio i.e., Man Infraconstructio and Hindware Home go up and down completely randomly.

Pair Corralation between Man Infraconstructio and Hindware Home

Assuming the 90 days trading horizon Man Infraconstruction Limited is expected to generate 1.15 times more return on investment than Hindware Home. However, Man Infraconstructio is 1.15 times more volatile than Hindware Home Innovation. It trades about 0.13 of its potential returns per unit of risk. Hindware Home Innovation is currently generating about -0.08 per unit of risk. If you would invest  17,600  in Man Infraconstruction Limited on October 25, 2024 and sell it today you would earn a total of  4,241  from holding Man Infraconstruction Limited or generate 24.1% return on investment over 90 days.

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

Man Infraconstruction Limited  vs.  Hindware Home Innovation

Man Infraconstruction

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Man Infraconstruction Limited are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. Even with relatively unsteady technical and fundamental indicators, Man Infraconstructio reported solid returns over the last few months and may actually be approaching a breakup point.

Hindware Home Innovation

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Hindware Home Innovation has generated negative risk-adjusted returns adding no value to investors with long positions. Even with unsteady performance in the last few months, the Stock's technical and fundamental indicators remain relatively invariable which may send shares a bit higher in February 2025. The latest agitation may also be a sign of long-running up-swing for the enterprise retail investors.

Pair Trading with Man Infraconstructio and Hindware Home

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

The idea behind Man Infraconstruction Limited and Hindware Home Innovation 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.