Correlation Between Ankit Metal and ASK AUTOMOTIVE

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Can any of the company-specific risk be diversified away by investing in both Ankit Metal and ASK AUTOMOTIVE 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 Ankit Metal and ASK AUTOMOTIVE into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ankit Metal Power and ASK AUTOMOTIVE LIMITED, you can compare the effects of market volatilities on Ankit Metal and ASK AUTOMOTIVE 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 Ankit Metal with a short position of ASK AUTOMOTIVE. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ankit Metal and ASK AUTOMOTIVE.

Diversification Opportunities for Ankit Metal and ASK AUTOMOTIVE

0.1
  Correlation Coefficient

Average diversification

The 3 months correlation between Ankit and ASK is 0.1. Overlapping area represents the amount of risk that can be diversified away by holding Ankit Metal Power and ASK AUTOMOTIVE LIMITED in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ASK AUTOMOTIVE and Ankit Metal 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 Ankit Metal Power are associated (or correlated) with ASK AUTOMOTIVE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ASK AUTOMOTIVE has no effect on the direction of Ankit Metal i.e., Ankit Metal and ASK AUTOMOTIVE go up and down completely randomly.

Pair Corralation between Ankit Metal and ASK AUTOMOTIVE

Assuming the 90 days trading horizon Ankit Metal is expected to generate 1.52 times less return on investment than ASK AUTOMOTIVE. In addition to that, Ankit Metal is 1.61 times more volatile than ASK AUTOMOTIVE LIMITED. It trades about 0.16 of its total potential returns per unit of risk. ASK AUTOMOTIVE LIMITED is currently generating about 0.39 per unit of volatility. If you would invest  41,560  in ASK AUTOMOTIVE LIMITED on September 15, 2024 and sell it today you would earn a total of  6,645  from holding ASK AUTOMOTIVE LIMITED or generate 15.99% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthInsignificant
Accuracy100.0%
ValuesDaily Returns

Ankit Metal Power  vs.  ASK AUTOMOTIVE LIMITED

 Performance 
       Timeline  
Ankit Metal Power 

Risk-Adjusted Performance

3 of 100

 
Weak
 
Strong
Insignificant
Compared to the overall equity markets, risk-adjusted returns on investments in Ankit Metal Power are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of rather uncertain basic indicators, Ankit Metal may actually be approaching a critical reversion point that can send shares even higher in January 2025.
ASK AUTOMOTIVE 

Risk-Adjusted Performance

2 of 100

 
Weak
 
Strong
Weak
Compared to the overall equity markets, risk-adjusted returns on investments in ASK AUTOMOTIVE LIMITED are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of very healthy essential indicators, ASK AUTOMOTIVE is not utilizing all of its potentials. The latest stock price disarray, may contribute to short-term losses for the investors.

Ankit Metal and ASK AUTOMOTIVE Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Ankit Metal and ASK AUTOMOTIVE

The main advantage of trading using opposite Ankit Metal and ASK AUTOMOTIVE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ankit Metal position performs unexpectedly, ASK AUTOMOTIVE 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 ASK AUTOMOTIVE will offset losses from the drop in ASK AUTOMOTIVE's long position.
The idea behind Ankit Metal Power and ASK AUTOMOTIVE 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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.

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