Correlation Between Shivalik Bimetal and Capacite Infraprojects

Can any of the company-specific risk be diversified away by investing in both Shivalik Bimetal and Capacite Infraprojects 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 Shivalik Bimetal and Capacite Infraprojects into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Shivalik Bimetal Controls and Capacite Infraprojects Limited, you can compare the effects of market volatilities on Shivalik Bimetal and Capacite Infraprojects 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 Shivalik Bimetal with a short position of Capacite Infraprojects. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shivalik Bimetal and Capacite Infraprojects.

Diversification Opportunities for Shivalik Bimetal and Capacite Infraprojects

-0.33

Correlation Coefficient

Shivalik Bimetal  Capacite Infraprojects

Very good diversification

The 3 months correlation between Shivalik and Capacite is -0.33. Overlapping area represents the amount of risk that can be diversified away by holding Shivalik Bimetal Controls and Capacite Infraprojects Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Capacite Infraprojects and Shivalik Bimetal 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 Shivalik Bimetal Controls are associated (or correlated) with Capacite Infraprojects. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Capacite Infraprojects has no effect on the direction of Shivalik Bimetal i.e., Shivalik Bimetal and Capacite Infraprojects go up and down completely randomly.

Pair Corralation between Shivalik Bimetal and Capacite Infraprojects

Assuming the 90 days trading horizon Shivalik Bimetal is expected to generate 3.92 times less return on investment than Capacite Infraprojects. But when comparing it to its historical volatility, Shivalik Bimetal Controls is 1.27 times less risky than Capacite Infraprojects. It trades about 0.03 of its potential returns per unit of risk. Capacite Infraprojects Limited is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest  25,945  in Capacite Infraprojects Limited on September 23, 2024 and sell it today you would earn a total of  17,865  from holding Capacite Infraprojects Limited or generate 68.86% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	99.62%
Values	Daily Returns

Shivalik Bimetal Controls  vs.  Capacite Infraprojects Limited

Shivalik Bimetal Controls

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Shivalik Bimetal Controls has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, Shivalik Bimetal is not utilizing all of its potentials. The recent stock price uproar, may contribute to short-horizon losses for the private investors.

Capacite Infraprojects

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Capacite Infraprojects Limited are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively unsteady forward indicators, Capacite Infraprojects unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Shivalik Bimetal and Capacite Infraprojects

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

The idea behind Shivalik Bimetal Controls and Capacite Infraprojects 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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.