Correlation Between Ratnamani Metals and Keynote Financial

Can any of the company-specific risk be diversified away by investing in both Ratnamani Metals and Keynote Financial 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 Ratnamani Metals and Keynote Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Ratnamani Metals Tubes and Keynote Financial Services, you can compare the effects of market volatilities on Ratnamani Metals and Keynote Financial 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 Ratnamani Metals with a short position of Keynote Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ratnamani Metals and Keynote Financial.

Diversification Opportunities for Ratnamani Metals and Keynote Financial

0.43

Correlation Coefficient

Ratnamani Metals  Keynote Financial

Very weak diversification

The 3 months correlation between Ratnamani and Keynote is 0.43. Overlapping area represents the amount of risk that can be diversified away by holding Ratnamani Metals Tubes and Keynote Financial Services in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Keynote Financial and Ratnamani Metals 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 Ratnamani Metals Tubes are associated (or correlated) with Keynote Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Keynote Financial has no effect on the direction of Ratnamani Metals i.e., Ratnamani Metals and Keynote Financial go up and down completely randomly.

Pair Corralation between Ratnamani Metals and Keynote Financial

Assuming the 90 days trading horizon Ratnamani Metals Tubes is expected to generate 0.77 times more return on investment than Keynote Financial. However, Ratnamani Metals Tubes is 1.29 times less risky than Keynote Financial. It trades about -0.1 of its potential returns per unit of risk. Keynote Financial Services is currently generating about -0.29 per unit of risk. If you would invest  354,530  in Ratnamani Metals Tubes on October 9, 2024 and sell it today you would lose (36,500) from holding Ratnamani Metals Tubes or give up 10.3% of portfolio value over 90 days.

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

Ratnamani Metals Tubes  vs.  Keynote Financial Services

Ratnamani Metals Tubes

Risk-Adjusted Performance

0 of 100

Very Weak

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

Keynote Financial

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Keynote Financial Services 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 comparatively stable which may send shares a bit higher in February 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Pair Trading with Ratnamani Metals and Keynote Financial

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

The idea behind Ratnamani Metals Tubes and Keynote Financial Services 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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.