Correlation Between Indian Metals and AGI Greenpac
Can any of the company-specific risk be diversified away by investing in both Indian Metals and AGI Greenpac 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 Indian Metals and AGI Greenpac into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Indian Metals Ferro and AGI Greenpac Limited, you can compare the effects of market volatilities on Indian Metals and AGI Greenpac 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 Indian Metals with a short position of AGI Greenpac. Check out your portfolio center. Please also check ongoing floating volatility patterns of Indian Metals and AGI Greenpac.
Diversification Opportunities for Indian Metals and AGI Greenpac
0.76 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Indian and AGI is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding Indian Metals Ferro and AGI Greenpac Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AGI Greenpac Limited and Indian Metals 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 Indian Metals Ferro are associated (or correlated) with AGI Greenpac. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AGI Greenpac Limited has no effect on the direction of Indian Metals i.e., Indian Metals and AGI Greenpac go up and down completely randomly.
Pair Corralation between Indian Metals and AGI Greenpac
Assuming the 90 days trading horizon Indian Metals Ferro is expected to generate 0.82 times more return on investment than AGI Greenpac. However, Indian Metals Ferro is 1.23 times less risky than AGI Greenpac. It trades about 0.48 of its potential returns per unit of risk. AGI Greenpac Limited is currently generating about 0.35 per unit of risk. If you would invest 76,065 in Indian Metals Ferro on September 13, 2024 and sell it today you would earn a total of 22,470 from holding Indian Metals Ferro or generate 29.54% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 90.91% |
| Values | Daily Returns |
Indian Metals Ferro vs. AGI Greenpac Limited
Performance |
| Timeline |
| Indian Metals Ferro |
| AGI Greenpac Limited |
Indian Metals and AGI Greenpac Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Indian Metals and AGI Greenpac
The main advantage of trading using opposite Indian Metals and AGI Greenpac positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Indian Metals position performs unexpectedly, AGI Greenpac 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 AGI Greenpac will offset losses from the drop in AGI Greenpac's long position.| Indian Metals vs. NMDC Limited | Indian Metals vs. Steel Authority of | Indian Metals vs. Embassy Office Parks | Indian Metals vs. Gujarat Narmada Valley |
| AGI Greenpac vs. Archean Chemical Industries | AGI Greenpac vs. Bajaj Holdings Investment | AGI Greenpac vs. Jindal Poly Investment | AGI Greenpac vs. Rashtriya Chemicals and |
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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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