Correlation Between Rajnandini Metal and DJ Mediaprint

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

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

Diversification Opportunities for Rajnandini Metal and DJ Mediaprint

-0.38

Correlation Coefficient

Rajnandini Metal  DJ Mediaprint

Very good diversification

The 3 months correlation between Rajnandini and DJML is -0.38. Overlapping area represents the amount of risk that can be diversified away by holding Rajnandini Metal Limited and DJ Mediaprint Logistics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on DJ Mediaprint Logistics and Rajnandini Metal 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 Rajnandini Metal Limited are associated (or correlated) with DJ Mediaprint. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of DJ Mediaprint Logistics has no effect on the direction of Rajnandini Metal i.e., Rajnandini Metal and DJ Mediaprint go up and down completely randomly.

Pair Corralation between Rajnandini Metal and DJ Mediaprint

Assuming the 90 days trading horizon Rajnandini Metal Limited is expected to under-perform the DJ Mediaprint. But the stock apears to be less risky and, when comparing its historical volatility, Rajnandini Metal Limited is 5.97 times less risky than DJ Mediaprint. The stock trades about -0.04 of its potential returns per unit of risk. The DJ Mediaprint Logistics is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest  4,839  in DJ Mediaprint Logistics on September 21, 2024 and sell it today you would earn a total of  15,997  from holding DJ Mediaprint Logistics or generate 330.58% return on investment over 90 days.

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

Rajnandini Metal Limited  vs.  DJ Mediaprint Logistics

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 uncertain performance in the last few months, the Stock's primary indicators remain somewhat strong which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

DJ Mediaprint Logistics

Risk-Adjusted Performance

27 of 100

Strong

Compared to the overall equity markets, risk-adjusted returns on investments in DJ Mediaprint Logistics are ranked lower than 27 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively unsteady basic indicators, DJ Mediaprint unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Rajnandini Metal and DJ Mediaprint

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

The idea behind Rajnandini Metal Limited and DJ Mediaprint Logistics 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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.