Correlation Between Teamlease Services and Thermax

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

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

Diversification Opportunities for Teamlease Services and Thermax

0.44

Correlation Coefficient

Teamlease Services  Thermax

Very weak diversification

The 3 months correlation between Teamlease and Thermax is 0.44. Overlapping area represents the amount of risk that can be diversified away by holding Teamlease Services Limited and Thermax Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Thermax Limited and Teamlease Services 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 Teamlease Services Limited are associated (or correlated) with Thermax. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Thermax Limited has no effect on the direction of Teamlease Services i.e., Teamlease Services and Thermax go up and down completely randomly.

Pair Corralation between Teamlease Services and Thermax

Assuming the 90 days trading horizon Teamlease Services Limited is expected to under-perform the Thermax. But the stock apears to be less risky and, when comparing its historical volatility, Teamlease Services Limited is 1.72 times less risky than Thermax. The stock trades about -0.34 of its potential returns per unit of risk. The Thermax Limited is currently generating about -0.05 of returns per unit of risk over similar time horizon. If you would invest  439,000  in Thermax Limited on December 27, 2024 and sell it today you would lose (61,325) from holding Thermax Limited or give up 13.97% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	98.39%
Values	Daily Returns

Teamlease Services Limited  vs.  Thermax Limited

Teamlease Services

Risk-Adjusted Performance

Very Weak

Over the last 90 days Teamlease Services Limited has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's basic indicators remain somewhat strong which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Thermax Limited

Risk-Adjusted Performance

Very Weak

Over the last 90 days Thermax Limited has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest uncertain performance, the Stock's primary indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

Pair Trading with Teamlease Services and Thermax

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

The idea behind Teamlease Services Limited and Thermax Limited 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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.