Correlation Between Page Industries and Zydus Wellness

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

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

Diversification Opportunities for Page Industries and Zydus Wellness

-0.29

Correlation Coefficient

Page Industries  Zydus Wellness

Very good diversification

The 3 months correlation between Page and Zydus is -0.29. Overlapping area represents the amount of risk that can be diversified away by holding Page Industries Limited and Zydus Wellness Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Zydus Wellness and Page Industries 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 Page Industries Limited are associated (or correlated) with Zydus Wellness. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Zydus Wellness has no effect on the direction of Page Industries i.e., Page Industries and Zydus Wellness go up and down completely randomly.

Pair Corralation between Page Industries and Zydus Wellness

Assuming the 90 days trading horizon Page Industries Limited is expected to generate 0.89 times more return on investment than Zydus Wellness. However, Page Industries Limited is 1.13 times less risky than Zydus Wellness. It trades about 0.09 of its potential returns per unit of risk. Zydus Wellness Limited is currently generating about -0.06 per unit of risk. If you would invest  4,302,485  in Page Industries Limited on September 12, 2024 and sell it today you would earn a total of  377,940  from holding Page Industries Limited or generate 8.78% return on investment over 90 days.

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

Page Industries Limited  vs.  Zydus Wellness Limited

Page Industries

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Page Industries Limited are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of rather uncertain forward indicators, Page Industries may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Zydus Wellness

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Zydus Wellness Limited has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest weak performance, the Stock's technical and fundamental indicators remain sound and the latest tumult on Wall Street may also be a sign of longer-term gains for the firm shareholders.

Pair Trading with Page Industries and Zydus Wellness

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

The idea behind Page Industries Limited and Zydus Wellness 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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.