Correlation Between Ankit Metal and Hi Tech

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

Diversification Opportunities for Ankit Metal and Hi Tech

0.07
  Correlation Coefficient

Significant diversification

The 3 months correlation between Ankit and HITECHGEAR is 0.07. Overlapping area represents the amount of risk that can be diversified away by holding Ankit Metal Power and The Hi Tech Gears in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hi Tech 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 Hi Tech. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hi Tech has no effect on the direction of Ankit Metal i.e., Ankit Metal and Hi Tech go up and down completely randomly.

Pair Corralation between Ankit Metal and Hi Tech

Assuming the 90 days trading horizon Ankit Metal Power is expected to under-perform the Hi Tech. In addition to that, Ankit Metal is 1.01 times more volatile than The Hi Tech Gears. It trades about -0.49 of its total potential returns per unit of risk. The Hi Tech Gears is currently generating about -0.11 per unit of volatility. If you would invest  80,725  in The Hi Tech Gears on October 28, 2024 and sell it today you would lose (4,205) from holding The Hi Tech Gears or give up 5.21% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthInsignificant
Accuracy95.24%
ValuesDaily Returns

Ankit Metal Power  vs.  The Hi Tech Gears

 Performance 
       Timeline  
Ankit Metal Power 

Risk-Adjusted Performance

4 of 100

 
Weak
 
Strong
Insignificant
Compared to the overall equity markets, risk-adjusted returns on investments in Ankit Metal Power are ranked lower than 4 (%) 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 February 2025.
Hi Tech 

Risk-Adjusted Performance

2 of 100

 
Weak
 
Strong
Weak
Compared to the overall equity markets, risk-adjusted returns on investments in The Hi Tech Gears are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable technical and fundamental indicators, Hi Tech is not utilizing all of its potentials. The latest stock price disturbance, may contribute to mid-run losses for the stockholders.

Ankit Metal and Hi Tech Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Ankit Metal and Hi Tech

The main advantage of trading using opposite Ankit Metal and Hi Tech positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ankit Metal position performs unexpectedly, Hi Tech 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 Hi Tech will offset losses from the drop in Hi Tech's long position.
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The idea behind Ankit Metal Power and The Hi Tech Gears 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 Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.

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