Correlation Between Sarthak Metals and Can Fin

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

By analyzing existing cross correlation between Sarthak Metals Limited and Can Fin Homes, you can compare the effects of market volatilities on Sarthak Metals and Can Fin 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 Sarthak Metals with a short position of Can Fin. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sarthak Metals and Can Fin.

Diversification Opportunities for Sarthak Metals and Can Fin

0.57

Correlation Coefficient

Sarthak Metals  Can Fin

Very weak diversification

The 3 months correlation between Sarthak and Can is 0.57. Overlapping area represents the amount of risk that can be diversified away by holding Sarthak Metals Limited and Can Fin Homes in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Can Fin Homes and Sarthak Metals 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 Sarthak Metals Limited are associated (or correlated) with Can Fin. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Can Fin Homes has no effect on the direction of Sarthak Metals i.e., Sarthak Metals and Can Fin go up and down completely randomly.

Pair Corralation between Sarthak Metals and Can Fin

Assuming the 90 days trading horizon Sarthak Metals Limited is expected to generate 1.82 times more return on investment than Can Fin. However, Sarthak Metals is 1.82 times more volatile than Can Fin Homes. It trades about -0.07 of its potential returns per unit of risk. Can Fin Homes is currently generating about -0.14 per unit of risk. If you would invest  18,673  in Sarthak Metals Limited on September 19, 2024 and sell it today you would lose (1,741) from holding Sarthak Metals Limited or give up 9.32% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	97.56%
Values	Daily Returns

Sarthak Metals Limited  vs.  Can Fin Homes

Sarthak Metals

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Sarthak Metals Limited are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable basic indicators, Sarthak Metals is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

Can Fin Homes

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Can Fin Homes has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest unfluctuating performance, the Stock's basic indicators remain strong and the recent confusion on Wall Street may also be a sign of long-lasting gains for the firm traders.

Pair Trading with Sarthak Metals and Can Fin

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

The idea behind Sarthak Metals Limited and Can Fin Homes 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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.