Correlation Between ShippingOf India and Pritish Nandy

Can any of the company-specific risk be diversified away by investing in both ShippingOf India and Pritish Nandy 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 ShippingOf India and Pritish Nandy into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Shipping and Pritish Nandy Communications, you can compare the effects of market volatilities on ShippingOf India and Pritish Nandy 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 ShippingOf India with a short position of Pritish Nandy. Check out your portfolio center. Please also check ongoing floating volatility patterns of ShippingOf India and Pritish Nandy.

Diversification Opportunities for ShippingOf India and Pritish Nandy

0.96

Correlation Coefficient

ShippingOf India  Pritish Nandy

Almost no diversification

The 3 months correlation between ShippingOf and Pritish is 0.96. Overlapping area represents the amount of risk that can be diversified away by holding Shipping and Pritish Nandy Communications in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pritish Nandy Commun and ShippingOf India 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 Shipping are associated (or correlated) with Pritish Nandy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pritish Nandy Commun has no effect on the direction of ShippingOf India i.e., ShippingOf India and Pritish Nandy go up and down completely randomly.

Pair Corralation between ShippingOf India and Pritish Nandy

Assuming the 90 days trading horizon Shipping is expected to generate 0.9 times more return on investment than Pritish Nandy. However, Shipping is 1.11 times less risky than Pritish Nandy. It trades about -0.27 of its potential returns per unit of risk. Pritish Nandy Communications is currently generating about -0.4 per unit of risk. If you would invest  23,428  in Shipping on December 1, 2024 and sell it today you would lose (8,834) from holding Shipping or give up 37.71% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Strong
Accuracy	98.41%
Values	Daily Returns

Shipping  vs.  Pritish Nandy Communications

ShippingOf India

Risk-Adjusted Performance

Very Weak

Over the last 90 days Shipping 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 rather sound which may send shares a bit higher in April 2025. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

Pritish Nandy Commun

Risk-Adjusted Performance

Very Weak

Over the last 90 days Pritish Nandy Communications has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unsteady performance in the last few months, the Stock's technical and fundamental indicators remain rather sound which may send shares a bit higher in April 2025. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

Pair Trading with ShippingOf India and Pritish Nandy

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

The idea behind Shipping and Pritish Nandy Communications 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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..