Correlation Between Usha Martin and Sakar Healthcare

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

Diversification Opportunities for Usha Martin and Sakar Healthcare

0.04

Correlation Coefficient

Usha Martin  Sakar Healthcare

Significant diversification

The 3 months correlation between Usha and Sakar is 0.04. Overlapping area represents the amount of risk that can be diversified away by holding Usha Martin Education and Sakar Healthcare Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sakar Healthcare 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 Sakar Healthcare. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sakar Healthcare has no effect on the direction of Usha Martin i.e., Usha Martin and Sakar Healthcare go up and down completely randomly.

Pair Corralation between Usha Martin and Sakar Healthcare

Assuming the 90 days trading horizon Usha Martin Education is expected to generate 1.24 times more return on investment than Sakar Healthcare. However, Usha Martin is 1.24 times more volatile than Sakar Healthcare Limited. It trades about 0.04 of its potential returns per unit of risk. Sakar Healthcare Limited is currently generating about 0.03 per unit of risk. If you would invest  480.00  in Usha Martin Education on September 26, 2024 and sell it today you would earn a total of  250.00  from holding Usha Martin Education or generate 52.08% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	99.18%
Values	Daily Returns

Usha Martin Education  vs.  Sakar Healthcare Limited

Usha Martin Education

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Usha Martin Education are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady essential indicators, Usha Martin exhibited solid returns over the last few months and may actually be approaching a breakup point.

Sakar Healthcare

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Sakar Healthcare Limited has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy forward-looking signals, Sakar Healthcare is not utilizing all of its potentials. The newest stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with Usha Martin and Sakar Healthcare

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

The idea behind Usha Martin Education and Sakar Healthcare 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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.