Correlation Between POWERGRID Infrastructure and Vraj Iron

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Can any of the company-specific risk be diversified away by investing in both POWERGRID Infrastructure and Vraj Iron 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 POWERGRID Infrastructure and Vraj Iron into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between POWERGRID Infrastructure Investment and Vraj Iron and, you can compare the effects of market volatilities on POWERGRID Infrastructure and Vraj Iron 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 POWERGRID Infrastructure with a short position of Vraj Iron. Check out your portfolio center. Please also check ongoing floating volatility patterns of POWERGRID Infrastructure and Vraj Iron.

Diversification Opportunities for POWERGRID Infrastructure and Vraj Iron

POWERGRIDVrajDiversified AwayPOWERGRIDVrajDiversified Away100%
0.39
  Correlation Coefficient

Weak diversification

The 3 months correlation between POWERGRID and Vraj is 0.39. Overlapping area represents the amount of risk that can be diversified away by holding POWERGRID Infrastructure Inves and Vraj Iron and in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vraj Iron and POWERGRID Infrastructure 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 POWERGRID Infrastructure Investment are associated (or correlated) with Vraj Iron. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vraj Iron has no effect on the direction of POWERGRID Infrastructure i.e., POWERGRID Infrastructure and Vraj Iron go up and down completely randomly.

Pair Corralation between POWERGRID Infrastructure and Vraj Iron

Assuming the 90 days trading horizon POWERGRID Infrastructure Investment is expected to generate 0.26 times more return on investment than Vraj Iron. However, POWERGRID Infrastructure Investment is 3.87 times less risky than Vraj Iron. It trades about -0.1 of its potential returns per unit of risk. Vraj Iron and is currently generating about -0.09 per unit of risk. If you would invest  9,008  in POWERGRID Infrastructure Investment on September 23, 2024 and sell it today you would lose (361.00) from holding POWERGRID Infrastructure Investment or give up 4.01% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthVery Weak
Accuracy98.44%
ValuesDaily Returns

POWERGRID Infrastructure Inves  vs.  Vraj Iron and

 Performance 
JavaScript chart by amCharts 3.21.15OctNovDec -15-10-50510
JavaScript chart by amCharts 3.21.15PGINVIT-IV VRAJ
       Timeline  
POWERGRID Infrastructure 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days POWERGRID Infrastructure Investment has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, POWERGRID Infrastructure is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.
JavaScript chart by amCharts 3.21.15OctNovDecNovDec8687888990919293
Vraj Iron 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days Vraj Iron and has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unsteady performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in January 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.
JavaScript chart by amCharts 3.21.15OctNovDecNovDec210220230240250260270280290

POWERGRID Infrastructure and Vraj Iron Volatility Contrast

   Predicted Return Density   
JavaScript chart by amCharts 3.21.15-1.05-0.77-0.49-0.21-0.03110.07950.320.60.881.16 0.20.40.60.81.0
JavaScript chart by amCharts 3.21.15PGINVIT-IV VRAJ
       Returns  

Pair Trading with POWERGRID Infrastructure and Vraj Iron

The main advantage of trading using opposite POWERGRID Infrastructure and Vraj Iron positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if POWERGRID Infrastructure position performs unexpectedly, Vraj Iron 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 Vraj Iron will offset losses from the drop in Vraj Iron's long position.
The idea behind POWERGRID Infrastructure Investment and Vraj Iron and 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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.

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