Correlation Between Niraj Ispat and Garware Hi

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

By analyzing existing cross correlation between Niraj Ispat Industries and Garware Hi Tech Films, you can compare the effects of market volatilities on Niraj Ispat and Garware Hi 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 Niraj Ispat with a short position of Garware Hi. Check out your portfolio center. Please also check ongoing floating volatility patterns of Niraj Ispat and Garware Hi.

Diversification Opportunities for Niraj Ispat and Garware Hi

0.72

Correlation Coefficient

Niraj Ispat  Garware Hi

Poor diversification

The 3 months correlation between Niraj and Garware is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding Niraj Ispat Industries and Garware Hi Tech Films in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Garware Hi Tech and Niraj Ispat 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 Niraj Ispat Industries are associated (or correlated) with Garware Hi. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Garware Hi Tech has no effect on the direction of Niraj Ispat i.e., Niraj Ispat and Garware Hi go up and down completely randomly.

Pair Corralation between Niraj Ispat and Garware Hi

If you would invest  408,620  in Garware Hi Tech Films on September 2, 2024 and sell it today you would earn a total of  85,085  from holding Garware Hi Tech Films or generate 20.82% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	95.24%
Values	Daily Returns

Niraj Ispat Industries  vs.  Garware Hi Tech Films

Niraj Ispat Industries

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Niraj Ispat Industries are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively unsteady basic indicators, Niraj Ispat may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Garware Hi Tech

Risk-Adjusted Performance

14 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Garware Hi Tech Films are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain technical and fundamental indicators, Garware Hi unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Niraj Ispat and Garware Hi

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

The idea behind Niraj Ispat Industries and Garware Hi Tech Films 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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.