Correlation Between Shigan Quantum and Agro Phos

Can any of the company-specific risk be diversified away by investing in both Shigan Quantum and Agro Phos 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 Shigan Quantum and Agro Phos into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Shigan Quantum Tech and Agro Phos India, you can compare the effects of market volatilities on Shigan Quantum and Agro Phos 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 Shigan Quantum with a short position of Agro Phos. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shigan Quantum and Agro Phos.

Diversification Opportunities for Shigan Quantum and Agro Phos

-0.24

Correlation Coefficient

Shigan Quantum  Agro Phos

Very good diversification

The 3 months correlation between Shigan and Agro is -0.24. Overlapping area represents the amount of risk that can be diversified away by holding Shigan Quantum Tech and Agro Phos India in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Agro Phos India and Shigan Quantum 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 Shigan Quantum Tech are associated (or correlated) with Agro Phos. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Agro Phos India has no effect on the direction of Shigan Quantum i.e., Shigan Quantum and Agro Phos go up and down completely randomly.

Pair Corralation between Shigan Quantum and Agro Phos

Assuming the 90 days trading horizon Shigan Quantum Tech is expected to under-perform the Agro Phos. In addition to that, Shigan Quantum is 1.91 times more volatile than Agro Phos India. It trades about -0.11 of its total potential returns per unit of risk. Agro Phos India is currently generating about -0.16 per unit of volatility. If you would invest  4,298  in Agro Phos India on October 10, 2024 and sell it today you would lose (251.00) from holding Agro Phos India or give up 5.84% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	90.0%
Values	Daily Returns

Shigan Quantum Tech  vs.  Agro Phos India

Shigan Quantum Tech

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Shigan Quantum Tech has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, Shigan Quantum is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

Agro Phos India

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Agro Phos India has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest uncertain performance, the Stock's technical indicators remain healthy and the recent disarray on Wall Street may also be a sign of long period gains for the firm investors.

Pair Trading with Shigan Quantum and Agro Phos

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

The idea behind Shigan Quantum Tech and Agro Phos India 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.