Correlation Between Shivalik Bimetal and Refex Industries

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

Diversification Opportunities for Shivalik Bimetal and Refex Industries

0.91

Correlation Coefficient

Shivalik Bimetal  Refex Industries

Almost no diversification

The 3 months correlation between Shivalik and Refex is 0.91. Overlapping area represents the amount of risk that can be diversified away by holding Shivalik Bimetal Controls and Refex Industries Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Refex Industries 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 Refex Industries. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Refex Industries has no effect on the direction of Shivalik Bimetal i.e., Shivalik Bimetal and Refex Industries go up and down completely randomly.

Pair Corralation between Shivalik Bimetal and Refex Industries

Assuming the 90 days trading horizon Shivalik Bimetal Controls is expected to generate 1.06 times more return on investment than Refex Industries. However, Shivalik Bimetal is 1.06 times more volatile than Refex Industries Limited. It trades about -0.08 of its potential returns per unit of risk. Refex Industries Limited is currently generating about -0.11 per unit of risk. If you would invest  57,269  in Shivalik Bimetal Controls on December 25, 2024 and sell it today you would lose (9,424) from holding Shivalik Bimetal Controls or give up 16.46% of portfolio value over 90 days.

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

Shivalik Bimetal Controls  vs.  Refex Industries Limited

Shivalik Bimetal Controls

Risk-Adjusted Performance

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 inconsistent performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in April 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Refex Industries

Risk-Adjusted Performance

Very Weak

Over the last 90 days Refex Industries Limited has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unfluctuating performance in the last few months, the Stock's technical and fundamental indicators remain very healthy which may send shares a bit higher in April 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

Pair Trading with Shivalik Bimetal and Refex Industries

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

The idea behind Shivalik Bimetal Controls and Refex Industries 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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.