Correlation Between TECIL Chemicals and Mindteck

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

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

Diversification Opportunities for TECIL Chemicals and Mindteck

-0.36

Correlation Coefficient

TECIL Chemicals  Mindteck

Very good diversification

The 3 months correlation between TECIL and Mindteck is -0.36. Overlapping area represents the amount of risk that can be diversified away by holding TECIL Chemicals and and Mindteck Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mindteck Limited and TECIL Chemicals 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 TECIL Chemicals and are associated (or correlated) with Mindteck. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mindteck Limited has no effect on the direction of TECIL Chemicals i.e., TECIL Chemicals and Mindteck go up and down completely randomly.

Pair Corralation between TECIL Chemicals and Mindteck

Assuming the 90 days trading horizon TECIL Chemicals and is expected to generate 0.8 times more return on investment than Mindteck. However, TECIL Chemicals and is 1.25 times less risky than Mindteck. It trades about 0.02 of its potential returns per unit of risk. Mindteck Limited is currently generating about -0.05 per unit of risk. If you would invest  2,320  in TECIL Chemicals and on September 17, 2024 and sell it today you would earn a total of  8.00  from holding TECIL Chemicals and or generate 0.34% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	96.83%
Values	Daily Returns

TECIL Chemicals and  vs.  Mindteck Limited

TECIL Chemicals

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in TECIL Chemicals and are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite fairly strong technical indicators, TECIL Chemicals is not utilizing all of its potentials. The latest stock price confusion, may contribute to short-horizon losses for the traders.

Mindteck Limited

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Mindteck Limited has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest uncertain performance, the Stock's technical and fundamental indicators remain sound and the latest tumult on Wall Street may also be a sign of longer-term gains for the firm shareholders.

Pair Trading with TECIL Chemicals and Mindteck

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

The idea behind TECIL Chemicals and and Mindteck 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.

Check out your portfolio center.

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 Dashboard module to portfolio dashboard that provides centralized access to all your investments.