Correlation Between Usha Martin and Gokul Refoils

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

By analyzing existing cross correlation between Usha Martin Education and Gokul Refoils and, you can compare the effects of market volatilities on Usha Martin and Gokul Refoils 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 Usha Martin with a short position of Gokul Refoils. Check out your portfolio center. Please also check ongoing floating volatility patterns of Usha Martin and Gokul Refoils.

Diversification Opportunities for Usha Martin and Gokul Refoils

0.61

Correlation Coefficient

Usha Martin  Gokul Refoils

Poor diversification

The 3 months correlation between Usha and Gokul is 0.61. Overlapping area represents the amount of risk that can be diversified away by holding Usha Martin Education and Gokul Refoils and in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gokul Refoils and Usha Martin 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 Usha Martin Education are associated (or correlated) with Gokul Refoils. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gokul Refoils has no effect on the direction of Usha Martin i.e., Usha Martin and Gokul Refoils go up and down completely randomly.

Pair Corralation between Usha Martin and Gokul Refoils

Assuming the 90 days trading horizon Usha Martin Education is expected to under-perform the Gokul Refoils. In addition to that, Usha Martin is 1.24 times more volatile than Gokul Refoils and. It trades about -0.2 of its total potential returns per unit of risk. Gokul Refoils and is currently generating about -0.14 per unit of volatility. If you would invest  6,056  in Gokul Refoils and on December 4, 2024 and sell it today you would lose (1,197) from holding Gokul Refoils and or give up 19.77% of portfolio value over 90 days.

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

Usha Martin Education  vs.  Gokul Refoils and

Usha Martin Education

Risk-Adjusted Performance

Very Weak

Over the last 90 days Usha Martin Education has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unfluctuating performance in the last few months, the Stock's essential indicators remain rather sound which may send shares a bit higher in April 2025. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

Gokul Refoils

Risk-Adjusted Performance

Very Weak

Over the last 90 days Gokul Refoils and has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unsteady performance in the last few months, the Stock's forward-looking signals remain very healthy which may send shares a bit higher in April 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

Pair Trading with Usha Martin and Gokul Refoils

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

The idea behind Usha Martin Education and Gokul Refoils 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 Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.