Correlation Between Shyam Metalics and Agarwal IndustrialLimite

Can any of the company-specific risk be diversified away by investing in both Shyam Metalics and Agarwal IndustrialLimite 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 Shyam Metalics and Agarwal IndustrialLimite into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Shyam Metalics and and Agarwal Industrial, you can compare the effects of market volatilities on Shyam Metalics and Agarwal IndustrialLimite 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 Shyam Metalics with a short position of Agarwal IndustrialLimite. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shyam Metalics and Agarwal IndustrialLimite.

Diversification Opportunities for Shyam Metalics and Agarwal IndustrialLimite

0.43

Correlation Coefficient

Shyam Metalics  Agarwal IndustrialLimite

Very weak diversification

The 3 months correlation between Shyam and Agarwal is 0.43. Overlapping area represents the amount of risk that can be diversified away by holding Shyam Metalics and and Agarwal Industrial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Agarwal IndustrialLimite and Shyam Metalics 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 Shyam Metalics and are associated (or correlated) with Agarwal IndustrialLimite. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Agarwal IndustrialLimite has no effect on the direction of Shyam Metalics i.e., Shyam Metalics and Agarwal IndustrialLimite go up and down completely randomly.

Pair Corralation between Shyam Metalics and Agarwal IndustrialLimite

Assuming the 90 days trading horizon Shyam Metalics and is expected to generate 0.88 times more return on investment than Agarwal IndustrialLimite. However, Shyam Metalics and is 1.14 times less risky than Agarwal IndustrialLimite. It trades about -0.1 of its potential returns per unit of risk. Agarwal Industrial is currently generating about -0.14 per unit of risk. If you would invest  83,220  in Shyam Metalics and on November 29, 2024 and sell it today you would lose (11,895) from holding Shyam Metalics and or give up 14.29% of portfolio value over 90 days.

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

Shyam Metalics and  vs.  Agarwal Industrial

Shyam Metalics

Risk-Adjusted Performance

Very Weak

Over the last 90 days Shyam Metalics and 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 March 2025. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

Agarwal IndustrialLimite

Risk-Adjusted Performance

Very Weak

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

Pair Trading with Shyam Metalics and Agarwal IndustrialLimite

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

The idea behind Shyam Metalics and and Agarwal Industrial 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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.