Correlation Between Shivalik Bimetal and Fortis Healthcare

Can any of the company-specific risk be diversified away by investing in both Shivalik Bimetal and Fortis Healthcare 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 Fortis Healthcare 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 Fortis Healthcare Limited, you can compare the effects of market volatilities on Shivalik Bimetal and Fortis Healthcare 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 Fortis Healthcare. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shivalik Bimetal and Fortis Healthcare.

Diversification Opportunities for Shivalik Bimetal and Fortis Healthcare

-0.52

Correlation Coefficient

Shivalik Bimetal  Fortis Healthcare

Excellent diversification

The 3 months correlation between Shivalik and Fortis is -0.52. Overlapping area represents the amount of risk that can be diversified away by holding Shivalik Bimetal Controls and Fortis Healthcare Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fortis Healthcare 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 Fortis Healthcare. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fortis Healthcare has no effect on the direction of Shivalik Bimetal i.e., Shivalik Bimetal and Fortis Healthcare go up and down completely randomly.

Pair Corralation between Shivalik Bimetal and Fortis Healthcare

Assuming the 90 days trading horizon Shivalik Bimetal Controls is expected to generate 1.01 times more return on investment than Fortis Healthcare. However, Shivalik Bimetal is 1.01 times more volatile than Fortis Healthcare Limited. It trades about 0.03 of its potential returns per unit of risk. Fortis Healthcare Limited is currently generating about -0.05 per unit of risk. If you would invest  57,225  in Shivalik Bimetal Controls on September 24, 2024 and sell it today you would earn a total of  505.00  from holding Shivalik Bimetal Controls or generate 0.88% return on investment over 90 days.

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

Shivalik Bimetal Controls  vs.  Fortis Healthcare Limited

Shivalik Bimetal Controls

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Shivalik Bimetal Controls are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. 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.

Fortis Healthcare

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Fortis Healthcare Limited are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Despite somewhat uncertain basic indicators, Fortis Healthcare sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Shivalik Bimetal and Fortis Healthcare

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

The idea behind Shivalik Bimetal Controls and Fortis Healthcare 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.

Check out your portfolio center.

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 Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.