Correlation Between Sarthak Metals and NIIT

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

Diversification Opportunities for Sarthak Metals and NIIT

0.83

Correlation Coefficient

Sarthak Metals  NIIT

Very poor diversification

The 3 months correlation between Sarthak and NIIT is 0.83. Overlapping area represents the amount of risk that can be diversified away by holding Sarthak Metals Limited and NIIT Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NIIT Limited 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 NIIT. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NIIT Limited has no effect on the direction of Sarthak Metals i.e., Sarthak Metals and NIIT go up and down completely randomly.

Pair Corralation between Sarthak Metals and NIIT

Assuming the 90 days trading horizon Sarthak Metals Limited is expected to generate 0.84 times more return on investment than NIIT. However, Sarthak Metals Limited is 1.19 times less risky than NIIT. It trades about -0.13 of its potential returns per unit of risk. NIIT Limited is currently generating about -0.14 per unit of risk. If you would invest  15,937  in Sarthak Metals Limited on December 24, 2024 and sell it today you would lose (3,987) from holding Sarthak Metals Limited or give up 25.02% of portfolio value over 90 days.

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

Sarthak Metals Limited  vs.  NIIT Limited

Sarthak Metals

Risk-Adjusted Performance

Very Weak

Over the last 90 days Sarthak Metals Limited has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in April 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

NIIT Limited

Risk-Adjusted Performance

Very Weak

Over the last 90 days NIIT Limited has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Stock's essential 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 Sarthak Metals and NIIT

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

The idea behind Sarthak Metals Limited and NIIT Limited 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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.