Correlation Between Din Capital and Industrial Urban

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

By analyzing existing cross correlation between Din Capital Investment and Industrial Urban Development, you can compare the effects of market volatilities on Din Capital and Industrial Urban 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 Din Capital with a short position of Industrial Urban. Check out your portfolio center. Please also check ongoing floating volatility patterns of Din Capital and Industrial Urban.

Diversification Opportunities for Din Capital and Industrial Urban

-0.52

Correlation Coefficient

Din Capital  Industrial Urban

Excellent diversification

The 3 months correlation between Din and Industrial is -0.52. Overlapping area represents the amount of risk that can be diversified away by holding Din Capital Investment and Industrial Urban Development in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Industrial Urban Dev and Din Capital 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 Din Capital Investment are associated (or correlated) with Industrial Urban. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Industrial Urban Dev has no effect on the direction of Din Capital i.e., Din Capital and Industrial Urban go up and down completely randomly.

Pair Corralation between Din Capital and Industrial Urban

Assuming the 90 days trading horizon Din Capital is expected to generate 4.83 times less return on investment than Industrial Urban. In addition to that, Din Capital is 1.02 times more volatile than Industrial Urban Development. It trades about 0.01 of its total potential returns per unit of risk. Industrial Urban Development is currently generating about 0.07 per unit of volatility. If you would invest  1,561,158  in Industrial Urban Development on October 22, 2024 and sell it today you would earn a total of  1,648,842  from holding Industrial Urban Development or generate 105.62% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	93.76%
Values	Daily Returns

Din Capital Investment  vs.  Industrial Urban Development

Din Capital Investment

Risk-Adjusted Performance

12 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Din Capital Investment are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating fundamental drivers, Din Capital displayed solid returns over the last few months and may actually be approaching a breakup point.

Industrial Urban Dev

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Industrial Urban Development has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy fundamental indicators, Industrial Urban is not utilizing all of its potentials. The recent stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with Din Capital and Industrial Urban

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

The idea behind Din Capital Investment and Industrial Urban Development 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.

Check out your portfolio center.

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 Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.