Correlation Between Taj GVK and Ankit Metal

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

By analyzing existing cross correlation between Taj GVK Hotels and Ankit Metal Power, you can compare the effects of market volatilities on Taj GVK and Ankit Metal 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 Taj GVK with a short position of Ankit Metal. Check out your portfolio center. Please also check ongoing floating volatility patterns of Taj GVK and Ankit Metal.

Diversification Opportunities for Taj GVK and Ankit Metal

0.59

Correlation Coefficient

Taj GVK  Ankit Metal

Very weak diversification

The 3 months correlation between Taj and Ankit is 0.59. Overlapping area represents the amount of risk that can be diversified away by holding Taj GVK Hotels and Ankit Metal Power in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ankit Metal Power and Taj GVK 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 Taj GVK Hotels are associated (or correlated) with Ankit Metal. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ankit Metal Power has no effect on the direction of Taj GVK i.e., Taj GVK and Ankit Metal go up and down completely randomly.

Pair Corralation between Taj GVK and Ankit Metal

Assuming the 90 days trading horizon Taj GVK is expected to generate 1.05 times less return on investment than Ankit Metal. In addition to that, Taj GVK is 1.8 times more volatile than Ankit Metal Power. It trades about 0.23 of its total potential returns per unit of risk. Ankit Metal Power is currently generating about 0.44 per unit of volatility. If you would invest  370.00  in Ankit Metal Power on October 8, 2024 and sell it today you would earn a total of  92.00  from holding Ankit Metal Power or generate 24.86% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	94.74%
Values	Daily Returns

Taj GVK Hotels  vs.  Ankit Metal Power

Taj GVK Hotels

Risk-Adjusted Performance

15 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Taj GVK Hotels are ranked lower than 15 (%) of all global equities and portfolios over the last 90 days. Despite somewhat uncertain technical and fundamental indicators, Taj GVK sustained solid returns over the last few months and may actually be approaching a breakup point.

Ankit Metal Power

Risk-Adjusted Performance

12 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Ankit Metal Power are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. In spite of rather weak basic indicators, Ankit Metal exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Taj GVK and Ankit Metal

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

The idea behind Taj GVK Hotels and Ankit Metal Power 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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.