Correlation Between Man Infraconstructio and Zensar Technologies

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

Diversification Opportunities for Man Infraconstructio and Zensar Technologies

0.83

Correlation Coefficient

Man Infraconstructio  Zensar Technologies

Very poor diversification

The 3 months correlation between Man and Zensar is 0.83. Overlapping area represents the amount of risk that can be diversified away by holding Man Infraconstruction Limited and Zensar Technologies Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Zensar Technologies 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 Zensar Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Zensar Technologies has no effect on the direction of Man Infraconstructio i.e., Man Infraconstructio and Zensar Technologies go up and down completely randomly.

Pair Corralation between Man Infraconstructio and Zensar Technologies

Assuming the 90 days trading horizon Man Infraconstruction Limited is expected to under-perform the Zensar Technologies. In addition to that, Man Infraconstructio is 1.2 times more volatile than Zensar Technologies Limited. It trades about -0.03 of its total potential returns per unit of risk. Zensar Technologies Limited is currently generating about 0.05 per unit of volatility. If you would invest  74,245  in Zensar Technologies Limited on October 22, 2024 and sell it today you would earn a total of  1,235  from holding Zensar Technologies Limited or generate 1.66% return on investment over 90 days.

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

Man Infraconstruction Limited  vs.  Zensar Technologies Limited

Man Infraconstruction

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Man Infraconstruction Limited are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. Even with relatively uncertain technical and fundamental indicators, Man Infraconstructio reported solid returns over the last few months and may actually be approaching a breakup point.

Zensar Technologies

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Zensar Technologies Limited are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively weak technical and fundamental indicators, Zensar Technologies unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Man Infraconstructio and Zensar Technologies

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

The idea behind Man Infraconstruction Limited and Zensar Technologies 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.

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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.