Correlation Between Nazara Technologies and Thermax

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

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

Diversification Opportunities for Nazara Technologies and Thermax

0.0

Correlation Coefficient

Nazara Technologies  Thermax

Pay attention - limited upside

The 3 months correlation between Nazara and Thermax is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Nazara Technologies Limited and Thermax Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Thermax Limited and Nazara Technologies 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 Nazara Technologies Limited are associated (or correlated) with Thermax. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Thermax Limited has no effect on the direction of Nazara Technologies i.e., Nazara Technologies and Thermax go up and down completely randomly.

Pair Corralation between Nazara Technologies and Thermax

If you would invest (100.00) in Thermax Limited on December 25, 2024 and sell it today you would earn a total of  100.00  from holding Thermax Limited or generate -100.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

Nazara Technologies Limited  vs.  Thermax Limited

Nazara Technologies

Risk-Adjusted Performance

Very Weak

Over the last 90 days Nazara Technologies Limited has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, Nazara Technologies is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Thermax Limited

Risk-Adjusted Performance

Very Weak

Over the last 90 days Thermax Limited has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly strong primary indicators, Thermax is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Nazara Technologies and Thermax

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

The idea behind Nazara Technologies Limited and Thermax 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.

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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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.