Correlation Between Prakash Steelage and Angel One

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

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

Diversification Opportunities for Prakash Steelage and Angel One

0.36

Correlation Coefficient

Prakash Steelage  Angel One

Weak diversification

The 3 months correlation between Prakash and Angel is 0.36. Overlapping area represents the amount of risk that can be diversified away by holding Prakash Steelage Limited and Angel One Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Angel One Limited and Prakash Steelage 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 Prakash Steelage Limited are associated (or correlated) with Angel One. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Angel One Limited has no effect on the direction of Prakash Steelage i.e., Prakash Steelage and Angel One go up and down completely randomly.

Pair Corralation between Prakash Steelage and Angel One

Assuming the 90 days trading horizon Prakash Steelage Limited is expected to generate 0.81 times more return on investment than Angel One. However, Prakash Steelage Limited is 1.23 times less risky than Angel One. It trades about -0.36 of its potential returns per unit of risk. Angel One Limited is currently generating about -0.51 per unit of risk. If you would invest  915.00  in Prakash Steelage Limited on October 10, 2024 and sell it today you would lose (107.00) from holding Prakash Steelage Limited or give up 11.69% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

Prakash Steelage Limited  vs.  Angel One Limited

Prakash Steelage

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Prakash Steelage Limited has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest unfluctuating performance, the Stock's basic indicators remain strong and the recent confusion on Wall Street may also be a sign of long-lasting gains for the firm traders.

Angel One Limited

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Angel One Limited are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating basic indicators, Angel One may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Pair Trading with Prakash Steelage and Angel One

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

The idea behind Prakash Steelage Limited and Angel One 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 Commodity Directory module to find actively traded commodities issued by global exchanges.