Correlation Between One 97 and Rajnandini Metal

Can any of the company-specific risk be diversified away by investing in both One 97 and Rajnandini 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 One 97 and Rajnandini Metal into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between One 97 Communications and Rajnandini Metal Limited, you can compare the effects of market volatilities on One 97 and Rajnandini 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 One 97 with a short position of Rajnandini Metal. Check out your portfolio center. Please also check ongoing floating volatility patterns of One 97 and Rajnandini Metal.

Diversification Opportunities for One 97 and Rajnandini Metal

-0.51

Correlation Coefficient

One 97  Rajnandini Metal

Excellent diversification

The 3 months correlation between One and Rajnandini is -0.51. Overlapping area represents the amount of risk that can be diversified away by holding One 97 Communications and Rajnandini Metal Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Rajnandini Metal and One 97 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 One 97 Communications are associated (or correlated) with Rajnandini Metal. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Rajnandini Metal has no effect on the direction of One 97 i.e., One 97 and Rajnandini Metal go up and down completely randomly.

Pair Corralation between One 97 and Rajnandini Metal

Assuming the 90 days trading horizon One 97 Communications is expected to generate 1.02 times more return on investment than Rajnandini Metal. However, One 97 is 1.02 times more volatile than Rajnandini Metal Limited. It trades about -0.11 of its potential returns per unit of risk. Rajnandini Metal Limited is currently generating about -0.3 per unit of risk. If you would invest  96,700  in One 97 Communications on October 11, 2024 and sell it today you would lose (6,495) from holding One 97 Communications or give up 6.72% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	95.24%
Values	Daily Returns

One 97 Communications  vs.  Rajnandini Metal Limited

One 97 Communications

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in One 97 Communications are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating basic indicators, One 97 displayed solid returns over the last few months and may actually be approaching a breakup point.

Rajnandini Metal

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Rajnandini Metal Limited has generated negative risk-adjusted returns adding no value to investors with long positions. Despite unfluctuating performance in the last few months, the Stock's primary indicators remain somewhat strong which may send shares a bit higher in February 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Pair Trading with One 97 and Rajnandini Metal

The main advantage of trading using opposite One 97 and Rajnandini Metal positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if One 97 position performs unexpectedly, Rajnandini 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 Rajnandini Metal will offset losses from the drop in Rajnandini Metal's long position.

The idea behind One 97 Communications and Rajnandini Metal 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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.