Correlation Between Sakar Healthcare and Manaksia Coated

Can any of the company-specific risk be diversified away by investing in both Sakar Healthcare and Manaksia Coated 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 Sakar Healthcare and Manaksia Coated into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Sakar Healthcare Limited and Manaksia Coated Metals, you can compare the effects of market volatilities on Sakar Healthcare and Manaksia Coated 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 Sakar Healthcare with a short position of Manaksia Coated. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sakar Healthcare and Manaksia Coated.

Diversification Opportunities for Sakar Healthcare and Manaksia Coated

-0.01

Correlation Coefficient

Sakar Healthcare  Manaksia Coated

Good diversification

The 3 months correlation between Sakar and Manaksia is -0.01. Overlapping area represents the amount of risk that can be diversified away by holding Sakar Healthcare Limited and Manaksia Coated Metals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Manaksia Coated Metals and Sakar Healthcare 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 Sakar Healthcare Limited are associated (or correlated) with Manaksia Coated. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Manaksia Coated Metals has no effect on the direction of Sakar Healthcare i.e., Sakar Healthcare and Manaksia Coated go up and down completely randomly.

Pair Corralation between Sakar Healthcare and Manaksia Coated

Assuming the 90 days trading horizon Sakar Healthcare Limited is expected to generate 1.35 times more return on investment than Manaksia Coated. However, Sakar Healthcare is 1.35 times more volatile than Manaksia Coated Metals. It trades about -0.38 of its potential returns per unit of risk. Manaksia Coated Metals is currently generating about -0.57 per unit of risk. If you would invest  29,235  in Sakar Healthcare Limited on November 20, 2024 and sell it today you would lose (5,605) from holding Sakar Healthcare Limited or give up 19.17% of portfolio value over 90 days.

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

Sakar Healthcare Limited  vs.  Manaksia Coated Metals

Sakar Healthcare

Risk-Adjusted Performance

Very Weak

Over the last 90 days Sakar Healthcare Limited has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of uncertain performance in the last few months, the Stock's forward-looking signals remain very healthy which may send shares a bit higher in March 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

Manaksia Coated Metals

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Manaksia Coated Metals are ranked lower than 16 (%) of all global equities and portfolios over the last 90 days. In spite of very uncertain basic indicators, Manaksia Coated displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Sakar Healthcare and Manaksia Coated

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

The idea behind Sakar Healthcare Limited and Manaksia Coated Metals 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 Portfolio Center module to all portfolio management and optimization tools to improve performance of your portfolios.