Correlation Between Shyam Metalics and Healthcare Global

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

Diversification Opportunities for Shyam Metalics and Healthcare Global

-0.03

Correlation Coefficient

Shyam Metalics  Healthcare Global

Good diversification

The 3 months correlation between Shyam and Healthcare is -0.03. Overlapping area represents the amount of risk that can be diversified away by holding Shyam Metalics and and Healthcare Global Enterprises in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Healthcare Global 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 Healthcare Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Healthcare Global has no effect on the direction of Shyam Metalics i.e., Shyam Metalics and Healthcare Global go up and down completely randomly.

Pair Corralation between Shyam Metalics and Healthcare Global

Assuming the 90 days trading horizon Shyam Metalics is expected to generate 4.84 times less return on investment than Healthcare Global. In addition to that, Shyam Metalics is 1.18 times more volatile than Healthcare Global Enterprises. It trades about 0.04 of its total potential returns per unit of risk. Healthcare Global Enterprises is currently generating about 0.24 per unit of volatility. If you would invest  38,685  in Healthcare Global Enterprises on August 31, 2024 and sell it today you would earn a total of  11,675  from holding Healthcare Global Enterprises or generate 30.18% return on investment over 90 days.

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

Shyam Metalics and  vs.  Healthcare Global Enterprises

Shyam Metalics

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Shyam Metalics and are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of rather sound technical and fundamental indicators, Shyam Metalics is not utilizing all of its potentials. The recent stock price tumult, may contribute to shorter-term losses for the shareholders.

Healthcare Global

Risk-Adjusted Performance

18 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Healthcare Global Enterprises are ranked lower than 18 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady technical and fundamental indicators, Healthcare Global exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Shyam Metalics and Healthcare Global

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

The idea behind Shyam Metalics and and Healthcare Global Enterprises 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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.