Correlation Between Sumeet Industries and Indian Overseas

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

By analyzing existing cross correlation between Sumeet Industries Limited and Indian Overseas Bank, you can compare the effects of market volatilities on Sumeet Industries and Indian Overseas 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 Sumeet Industries with a short position of Indian Overseas. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sumeet Industries and Indian Overseas.

Diversification Opportunities for Sumeet Industries and Indian Overseas

-0.07

Correlation Coefficient

Sumeet Industries  Indian Overseas

Good diversification

The 3 months correlation between Sumeet and Indian is -0.07. Overlapping area represents the amount of risk that can be diversified away by holding Sumeet Industries Limited and Indian Overseas Bank in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Indian Overseas Bank and Sumeet Industries 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 Sumeet Industries Limited are associated (or correlated) with Indian Overseas. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Indian Overseas Bank has no effect on the direction of Sumeet Industries i.e., Sumeet Industries and Indian Overseas go up and down completely randomly.

Pair Corralation between Sumeet Industries and Indian Overseas

If you would invest  9,780  in Sumeet Industries Limited on October 6, 2024 and sell it today you would earn a total of  0.00  from holding Sumeet Industries Limited or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	90.48%
Values	Daily Returns

Sumeet Industries Limited  vs.  Indian Overseas Bank

Sumeet Industries

Risk-Adjusted Performance

13 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Sumeet Industries Limited are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. Despite fairly unsteady basic indicators, Sumeet Industries may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Indian Overseas Bank

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Indian Overseas Bank are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of rather sound technical and fundamental indicators, Indian Overseas is not utilizing all of its potentials. The recent stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with Sumeet Industries and Indian Overseas

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

The idea behind Sumeet Industries Limited and Indian Overseas Bank 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 Portfolio Center module to all portfolio management and optimization tools to improve performance of your portfolios.