Correlation Between Zomato and Ashapura Minechem

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

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

Diversification Opportunities for Zomato and Ashapura Minechem

-0.34

Correlation Coefficient

Zomato  Ashapura Minechem

Very good diversification

The 3 months correlation between Zomato and Ashapura is -0.34. Overlapping area represents the amount of risk that can be diversified away by holding Zomato Limited and Ashapura Minechem Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ashapura Minechem and Zomato 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 Zomato Limited are associated (or correlated) with Ashapura Minechem. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ashapura Minechem has no effect on the direction of Zomato i.e., Zomato and Ashapura Minechem go up and down completely randomly.

Pair Corralation between Zomato and Ashapura Minechem

Assuming the 90 days trading horizon Zomato Limited is expected to generate 0.67 times more return on investment than Ashapura Minechem. However, Zomato Limited is 1.49 times less risky than Ashapura Minechem. It trades about 0.14 of its potential returns per unit of risk. Ashapura Minechem Limited is currently generating about 0.08 per unit of risk. If you would invest  5,075  in Zomato Limited on December 4, 2024 and sell it today you would earn a total of  17,139  from holding Zomato Limited or generate 337.71% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	99.79%
Values	Daily Returns

Zomato Limited  vs.  Ashapura Minechem Limited

Zomato Limited

Risk-Adjusted Performance

Very Weak

Over the last 90 days Zomato 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.

Ashapura Minechem

Risk-Adjusted Performance

Very Weak

Over the last 90 days Ashapura Minechem Limited has generated negative risk-adjusted returns adding no value to investors with long positions. Even with latest weak performance, the Stock's primary indicators remain invariable and the latest agitation on Wall Street may also be a sign of long-running gains for the enterprise retail investors.

Pair Trading with Zomato and Ashapura Minechem

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

The idea behind Zomato Limited and Ashapura Minechem 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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.