Correlation Between Amreli Steels and Gul Ahmed
Can any of the company-specific risk be diversified away by investing in both Amreli Steels and Gul Ahmed 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 Amreli Steels and Gul Ahmed into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Amreli Steels and Gul Ahmed Textile, you can compare the effects of market volatilities on Amreli Steels and Gul Ahmed 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 Amreli Steels with a short position of Gul Ahmed. Check out your portfolio center. Please also check ongoing floating volatility patterns of Amreli Steels and Gul Ahmed.
Diversification Opportunities for Amreli Steels and Gul Ahmed
0.16 | Correlation Coefficient |
Average diversification
The 3 months correlation between Amreli and Gul is 0.16. Overlapping area represents the amount of risk that can be diversified away by holding Amreli Steels and Gul Ahmed Textile in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gul Ahmed Textile and Amreli Steels 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 Amreli Steels are associated (or correlated) with Gul Ahmed. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gul Ahmed Textile has no effect on the direction of Amreli Steels i.e., Amreli Steels and Gul Ahmed go up and down completely randomly.
Pair Corralation between Amreli Steels and Gul Ahmed
Assuming the 90 days trading horizon Amreli Steels is expected to generate 1.2 times more return on investment than Gul Ahmed. However, Amreli Steels is 1.2 times more volatile than Gul Ahmed Textile. It trades about 0.03 of its potential returns per unit of risk. Gul Ahmed Textile is currently generating about 0.04 per unit of risk. If you would invest 1,774 in Amreli Steels on September 12, 2024 and sell it today you would earn a total of 493.00 from holding Amreli Steels or generate 27.79% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Amreli Steels vs. Gul Ahmed Textile
Performance |
| Timeline |
| Amreli Steels |
| Gul Ahmed Textile |
Amreli Steels and Gul Ahmed Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Amreli Steels and Gul Ahmed
The main advantage of trading using opposite Amreli Steels and Gul Ahmed positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Amreli Steels position performs unexpectedly, Gul Ahmed 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 Gul Ahmed will offset losses from the drop in Gul Ahmed's long position.| Amreli Steels vs. Masood Textile Mills | Amreli Steels vs. Fauji Foods | Amreli Steels vs. KSB Pumps | Amreli Steels vs. Mari Petroleum |
| Gul Ahmed vs. Agha Steel Industries | Gul Ahmed vs. Air Link Communication | Gul Ahmed vs. Beco Steel | Gul Ahmed vs. Amreli Steels |
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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
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