Correlation Between Man Infraconstructio and Mahamaya Steel

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

Diversification Opportunities for Man Infraconstructio and Mahamaya Steel

-0.6

Correlation Coefficient

Man Infraconstructio  Mahamaya Steel

Excellent diversification

The 3 months correlation between Man and Mahamaya is -0.6. Overlapping area represents the amount of risk that can be diversified away by holding Man Infraconstruction Limited and Mahamaya Steel Industries in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mahamaya Steel Industries 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 Mahamaya Steel. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mahamaya Steel Industries has no effect on the direction of Man Infraconstructio i.e., Man Infraconstructio and Mahamaya Steel go up and down completely randomly.

Pair Corralation between Man Infraconstructio and Mahamaya Steel

Assuming the 90 days trading horizon Man Infraconstruction Limited is expected to generate 0.83 times more return on investment than Mahamaya Steel. However, Man Infraconstruction Limited is 1.21 times less risky than Mahamaya Steel. It trades about 0.11 of its potential returns per unit of risk. Mahamaya Steel Industries is currently generating about 0.09 per unit of risk. If you would invest  7,310  in Man Infraconstruction Limited on October 5, 2024 and sell it today you would earn a total of  17,839  from holding Man Infraconstruction Limited or generate 244.04% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	99.59%
Values	Daily Returns

Man Infraconstruction Limited  vs.  Mahamaya Steel Industries

Man Infraconstruction

Risk-Adjusted Performance

15 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Man Infraconstruction Limited are ranked lower than 15 (%) of all global equities and portfolios over the last 90 days. Even with relatively weak technical and fundamental indicators, Man Infraconstructio reported solid returns over the last few months and may actually be approaching a breakup point.

Mahamaya Steel Industries

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Mahamaya Steel Industries are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of rather sound technical and fundamental indicators, Mahamaya Steel is not utilizing all of its potentials. The newest stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with Man Infraconstructio and Mahamaya Steel

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

The idea behind Man Infraconstruction Limited and Mahamaya Steel Industries 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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.