Correlation Between Ankit Metal and Gabriel India

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

Diversification Opportunities for Ankit Metal and Gabriel India

0.43
  Correlation Coefficient

Very weak diversification

The 3 months correlation between Ankit and Gabriel is 0.43. Overlapping area represents the amount of risk that can be diversified away by holding Ankit Metal Power and Gabriel India Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gabriel India Limited 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 Gabriel India. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gabriel India Limited has no effect on the direction of Ankit Metal i.e., Ankit Metal and Gabriel India go up and down completely randomly.

Pair Corralation between Ankit Metal and Gabriel India

Assuming the 90 days trading horizon Ankit Metal Power is expected to under-perform the Gabriel India. In addition to that, Ankit Metal is 1.27 times more volatile than Gabriel India Limited. It trades about -0.1 of its total potential returns per unit of risk. Gabriel India Limited is currently generating about -0.1 per unit of volatility. If you would invest  51,151  in Gabriel India Limited on August 29, 2024 and sell it today you would lose (7,726) from holding Gabriel India Limited or give up 15.1% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthWeak
Accuracy100.0%
ValuesDaily Returns

Ankit Metal Power  vs.  Gabriel India Limited

 Performance 
       Timeline  
Ankit Metal Power 

Risk-Adjusted Performance

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Weak
 
Strong
Very Weak
Over the last 90 days Ankit Metal Power has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of uncertain performance in the last few months, the Stock's basic indicators remain rather sound which may send shares a bit higher in December 2024. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.
Gabriel India Limited 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days Gabriel India Limited has generated negative risk-adjusted returns adding no value to investors with long positions. Despite unsteady performance in the last few months, the Stock's forward indicators remain quite persistent which may send shares a bit higher in December 2024. The latest mess may also be a sign of long-standing up-swing for the company institutional investors.

Ankit Metal and Gabriel India Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Ankit Metal and Gabriel India

The main advantage of trading using opposite Ankit Metal and Gabriel India positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ankit Metal position performs unexpectedly, Gabriel India 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 Gabriel India will offset losses from the drop in Gabriel India's long position.
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The idea behind Ankit Metal Power and Gabriel India 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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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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.

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