Correlation Between Sintex Plastics and Nahar Industrial

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

Diversification Opportunities for Sintex Plastics and Nahar Industrial

0.0

Correlation Coefficient

Sintex Plastics  Nahar Industrial

Pay attention - limited upside

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

Pair Corralation between Sintex Plastics and Nahar Industrial

If you would invest  13,231  in Nahar Industrial Enterprises on September 20, 2024 and sell it today you would earn a total of  2,078  from holding Nahar Industrial Enterprises or generate 15.71% 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.  Nahar Industrial Enterprises

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.

Nahar Industrial Ent

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Nahar Industrial Enterprises are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of very healthy fundamental indicators, Nahar Industrial is not utilizing all of its potentials. The newest stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with Sintex Plastics and Nahar Industrial

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

The idea behind Sintex Plastics Technology and Nahar Industrial 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.

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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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.