Correlation Between Niraj Ispat and Healthcare Global

Can any of the company-specific risk be diversified away by investing in both Niraj Ispat and Healthcare Global 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 Healthcare Global 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 Healthcare Global Enterprises, you can compare the effects of market volatilities on Niraj Ispat and Healthcare Global 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 Healthcare Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of Niraj Ispat and Healthcare Global.

Diversification Opportunities for Niraj Ispat and Healthcare Global

0.32

Correlation Coefficient

Niraj Ispat  Healthcare Global

Weak diversification

The 3 months correlation between Niraj and Healthcare is 0.32. Overlapping area represents the amount of risk that can be diversified away by holding Niraj Ispat Industries and Healthcare Global Enterprises in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Healthcare Global 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 Healthcare Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Healthcare Global has no effect on the direction of Niraj Ispat i.e., Niraj Ispat and Healthcare Global go up and down completely randomly.

Pair Corralation between Niraj Ispat and Healthcare Global

Assuming the 90 days trading horizon Niraj Ispat is expected to generate 1.42 times less return on investment than Healthcare Global. But when comparing it to its historical volatility, Niraj Ispat Industries is 2.27 times less risky than Healthcare Global. It trades about 0.16 of its potential returns per unit of risk. Healthcare Global Enterprises is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest  47,235  in Healthcare Global Enterprises on December 26, 2024 and sell it today you would earn a total of  5,620  from holding Healthcare Global Enterprises or generate 11.9% return on investment over 90 days.

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

Niraj Ispat Industries  vs.  Healthcare Global Enterprises

Niraj Ispat Industries

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Niraj Ispat Industries are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively weak basic indicators, Niraj Ispat may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Healthcare Global

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Healthcare Global Enterprises are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of rather unfluctuating technical and fundamental indicators, Healthcare Global exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Niraj Ispat and Healthcare Global

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

The idea behind Niraj Ispat Industries and Healthcare Global Enterprises 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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.