Correlation Between General Insuranceof and Indian Metals

Specify exactly 2 symbols:
Can any of the company-specific risk be diversified away by investing in both General Insuranceof and Indian 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 General Insuranceof and Indian Metals into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between General Insurance and Indian Metals Ferro, you can compare the effects of market volatilities on General Insuranceof and Indian 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 General Insuranceof with a short position of Indian Metals. Check out your portfolio center. Please also check ongoing floating volatility patterns of General Insuranceof and Indian Metals.

Diversification Opportunities for General Insuranceof and Indian Metals

-0.19
  Correlation Coefficient

Good diversification

The 3 months correlation between General and Indian is -0.19. Overlapping area represents the amount of risk that can be diversified away by holding General Insurance and Indian Metals Ferro in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Indian Metals Ferro and General Insuranceof 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 General Insurance are associated (or correlated) with Indian Metals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Indian Metals Ferro has no effect on the direction of General Insuranceof i.e., General Insuranceof and Indian Metals go up and down completely randomly.

Pair Corralation between General Insuranceof and Indian Metals

Assuming the 90 days trading horizon General Insuranceof is expected to generate 1.28 times less return on investment than Indian Metals. But when comparing it to its historical volatility, General Insurance is 1.02 times less risky than Indian Metals. It trades about 0.09 of its potential returns per unit of risk. Indian Metals Ferro is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest  25,001  in Indian Metals Ferro on August 30, 2024 and sell it today you would earn a total of  57,489  from holding Indian Metals Ferro or generate 229.95% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthInsignificant
Accuracy99.74%
ValuesDaily Returns

General Insurance  vs.  Indian Metals Ferro

 Performance 
       Timeline  
General Insuranceof 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Weak
Over the last 90 days General Insurance has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy fundamental indicators, General Insuranceof is not utilizing all of its potentials. The latest stock price disarray, may contribute to short-term losses for the investors.
Indian Metals Ferro 

Risk-Adjusted Performance

12 of 100

 
Weak
 
Strong
Good
Compared to the overall equity markets, risk-adjusted returns on investments in Indian Metals Ferro are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively weak basic indicators, Indian Metals unveiled solid returns over the last few months and may actually be approaching a breakup point.

General Insuranceof and Indian Metals Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with General Insuranceof and Indian Metals

The main advantage of trading using opposite General Insuranceof and Indian Metals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if General Insuranceof position performs unexpectedly, Indian 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 Indian Metals will offset losses from the drop in Indian Metals' long position.
The idea behind General Insurance and Indian Metals Ferro 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.
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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.

Other Complementary Tools

Efficient Frontier
Plot and analyze your portfolio and positions against risk-return landscape of the market.
Theme Ratings
Determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance
Portfolio Volatility
Check portfolio volatility and analyze historical return density to properly model market risk
ETFs
Find actively traded Exchange Traded Funds (ETF) from around the world
FinTech Suite
Use AI to screen and filter profitable investment opportunities