Correlation Between Pritish Nandy and Hexa Tradex

Can any of the company-specific risk be diversified away by investing in both Pritish Nandy and Hexa Tradex 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 Pritish Nandy and Hexa Tradex into the same portfolio, which is an essential part of the fundamental portfolio management process.

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

Diversification Opportunities for Pritish Nandy and Hexa Tradex

0.79

Correlation Coefficient

Pritish Nandy  Hexa Tradex

Poor diversification

The 3 months correlation between Pritish and Hexa is 0.79. Overlapping area represents the amount of risk that can be diversified away by holding Pritish Nandy Communications and Hexa Tradex Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hexa Tradex Limited and Pritish Nandy 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 Pritish Nandy Communications are associated (or correlated) with Hexa Tradex. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hexa Tradex Limited has no effect on the direction of Pritish Nandy i.e., Pritish Nandy and Hexa Tradex go up and down completely randomly.

Pair Corralation between Pritish Nandy and Hexa Tradex

Assuming the 90 days trading horizon Pritish Nandy is expected to generate 1.14 times less return on investment than Hexa Tradex. In addition to that, Pritish Nandy is 1.46 times more volatile than Hexa Tradex Limited. It trades about 0.03 of its total potential returns per unit of risk. Hexa Tradex Limited is currently generating about 0.04 per unit of volatility. If you would invest  15,735  in Hexa Tradex Limited on October 24, 2024 and sell it today you would earn a total of  7,180  from holding Hexa Tradex Limited or generate 45.63% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	99.8%
Values	Daily Returns

Pritish Nandy Communications  vs.  Hexa Tradex Limited

Pritish Nandy Commun

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Pritish Nandy Communications has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Stock's technical and fundamental indicators remain rather sound which may send shares a bit higher in February 2025. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

Hexa Tradex Limited

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Hexa Tradex Limited has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest conflicting performance, the Stock's fundamental indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

Pair Trading with Pritish Nandy and Hexa Tradex

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

The idea behind Pritish Nandy Communications and Hexa Tradex 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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.