Correlation Between Taj GVK and Shyam Metalics

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

Diversification Opportunities for Taj GVK and Shyam Metalics

-0.29

Correlation Coefficient

Taj GVK  Shyam Metalics

Very good diversification

The 3 months correlation between Taj and Shyam is -0.29. Overlapping area represents the amount of risk that can be diversified away by holding Taj GVK Hotels and Shyam Metalics and in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shyam Metalics 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 Shyam Metalics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shyam Metalics has no effect on the direction of Taj GVK i.e., Taj GVK and Shyam Metalics go up and down completely randomly.

Pair Corralation between Taj GVK and Shyam Metalics

Assuming the 90 days trading horizon Taj GVK Hotels is expected to generate 1.02 times more return on investment than Shyam Metalics. However, Taj GVK is 1.02 times more volatile than Shyam Metalics and. It trades about 0.08 of its potential returns per unit of risk. Shyam Metalics and is currently generating about 0.03 per unit of risk. If you would invest  32,535  in Taj GVK Hotels on September 12, 2024 and sell it today you would earn a total of  3,420  from holding Taj GVK Hotels or generate 10.51% return on investment over 90 days.

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

Taj GVK Hotels  vs.  Shyam Metalics and

Taj GVK Hotels

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Taj GVK Hotels are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite somewhat unfluctuating technical and fundamental indicators, Taj GVK may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Shyam Metalics

Risk-Adjusted Performance

2 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Shyam Metalics and are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of rather sound technical and fundamental indicators, Shyam Metalics is not utilizing all of its potentials. The newest stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with Taj GVK and Shyam Metalics

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

The idea behind Taj GVK Hotels and Shyam Metalics and 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 Equity Valuation module to check real value of public entities based on technical and fundamental data.