Correlation Between Sintex Plastics and Avonmore Capital

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

By analyzing existing cross correlation between Sintex Plastics Technology and Avonmore Capital Management, you can compare the effects of market volatilities on Sintex Plastics and Avonmore Capital 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 Sintex Plastics with a short position of Avonmore Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sintex Plastics and Avonmore Capital.

Diversification Opportunities for Sintex Plastics and Avonmore Capital

0.0

Correlation Coefficient

Sintex Plastics  Avonmore Capital

Pay attention - limited upside

The 3 months correlation between Sintex and Avonmore is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Sintex Plastics Technology and Avonmore Capital Management in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Avonmore Capital Man and Sintex Plastics 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 Sintex Plastics Technology are associated (or correlated) with Avonmore Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Avonmore Capital Man has no effect on the direction of Sintex Plastics i.e., Sintex Plastics and Avonmore Capital go up and down completely randomly.

Pair Corralation between Sintex Plastics and Avonmore Capital

If you would invest  1,387  in Avonmore Capital Management on September 20, 2024 and sell it today you would earn a total of  209.00  from holding Avonmore Capital Management or generate 15.07% return on investment over 90 days.

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

Sintex Plastics Technology  vs.  Avonmore Capital Management

Sintex Plastics Tech

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Sintex Plastics Technology has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, Sintex Plastics is not utilizing all of its potentials. The current stock price uproar, may contribute to short-horizon losses for the private investors.

Avonmore Capital Man

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Avonmore Capital Management has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable basic indicators, Avonmore Capital is not utilizing all of its potentials. The current stock price agitation, may contribute to short-term losses for the retail investors.

Pair Trading with Sintex Plastics and Avonmore Capital

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

The idea behind Sintex Plastics Technology and Avonmore Capital Management 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 Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.