Correlation Between Emkay Global and Sarthak Metals
Can any of the company-specific risk be diversified away by investing in both Emkay Global and Sarthak Metals 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 Emkay Global and Sarthak Metals into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Emkay Global Financial and Sarthak Metals Limited, you can compare the effects of market volatilities on Emkay Global and Sarthak Metals 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 Emkay Global with a short position of Sarthak Metals. Check out your portfolio center. Please also check ongoing floating volatility patterns of Emkay Global and Sarthak Metals.
Diversification Opportunities for Emkay Global and Sarthak Metals
-0.67 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Emkay and Sarthak is -0.67. Overlapping area represents the amount of risk that can be diversified away by holding Emkay Global Financial and Sarthak Metals Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sarthak Metals and Emkay Global 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 Emkay Global Financial are associated (or correlated) with Sarthak Metals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sarthak Metals has no effect on the direction of Emkay Global i.e., Emkay Global and Sarthak Metals go up and down completely randomly.
Pair Corralation between Emkay Global and Sarthak Metals
Assuming the 90 days trading horizon Emkay Global Financial is expected to under-perform the Sarthak Metals. But the stock apears to be less risky and, when comparing its historical volatility, Emkay Global Financial is 2.0 times less risky than Sarthak Metals. The stock trades about -0.35 of its potential returns per unit of risk. The Sarthak Metals Limited is currently generating about -0.16 of returns per unit of risk over similar time horizon. If you would invest 17,248 in Sarthak Metals Limited on October 15, 2024 and sell it today you would lose (1,738) from holding Sarthak Metals Limited or give up 10.08% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Emkay Global Financial vs. Sarthak Metals Limited
Performance |
| Timeline |
| Emkay Global Financial |
| Sarthak Metals |
Emkay Global and Sarthak Metals Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Emkay Global and Sarthak Metals
The main advantage of trading using opposite Emkay Global and Sarthak Metals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Emkay Global position performs unexpectedly, Sarthak Metals 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 Sarthak Metals will offset losses from the drop in Sarthak Metals' long position.| Emkay Global vs. Kingfa Science Technology | Emkay Global vs. Rico Auto Industries | Emkay Global vs. GACM Technologies Limited | Emkay Global vs. COSMO FIRST LIMITED |
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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 Center module to all portfolio management and optimization tools to improve performance of your portfolios.
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