Correlation Between Madhav Copper and Ankit Metal

Can any of the company-specific risk be diversified away by investing in both Madhav Copper and Ankit Metal 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 Madhav Copper and Ankit Metal into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Madhav Copper Limited and Ankit Metal Power, you can compare the effects of market volatilities on Madhav Copper and Ankit Metal 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 Madhav Copper with a short position of Ankit Metal. Check out your portfolio center. Please also check ongoing floating volatility patterns of Madhav Copper and Ankit Metal.

Diversification Opportunities for Madhav Copper and Ankit Metal

-0.19

Correlation Coefficient

Madhav Copper  Ankit Metal

Good diversification

The 3 months correlation between Madhav and Ankit is -0.19. Overlapping area represents the amount of risk that can be diversified away by holding Madhav Copper Limited and Ankit Metal Power in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ankit Metal Power and Madhav Copper 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 Madhav Copper Limited are associated (or correlated) with Ankit Metal. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ankit Metal Power has no effect on the direction of Madhav Copper i.e., Madhav Copper and Ankit Metal go up and down completely randomly.

Pair Corralation between Madhav Copper and Ankit Metal

Assuming the 90 days trading horizon Madhav Copper Limited is expected to generate 1.32 times more return on investment than Ankit Metal. However, Madhav Copper is 1.32 times more volatile than Ankit Metal Power. It trades about 0.12 of its potential returns per unit of risk. Ankit Metal Power is currently generating about -0.07 per unit of risk. If you would invest  3,881  in Madhav Copper Limited on September 1, 2024 and sell it today you would earn a total of  1,137  from holding Madhav Copper Limited or generate 29.3% return on investment over 90 days.

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

Madhav Copper Limited  vs.  Ankit Metal Power

Madhav Copper Limited

Risk-Adjusted Performance

9 of 100

OK

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

Ankit Metal Power

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Ankit Metal Power has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of uncertain performance in the last few months, the Stock's basic indicators remain rather sound which may send shares a bit higher in December 2024. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

Pair Trading with Madhav Copper and Ankit Metal

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

The idea behind Madhav Copper Limited and Ankit Metal Power 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.