Correlation Between Indian Metals and Emkay Global
Can any of the company-specific risk be diversified away by investing in both Indian Metals and Emkay Global 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 Emkay Global 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 Emkay Global Financial, you can compare the effects of market volatilities on Indian Metals and Emkay Global 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 Emkay Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of Indian Metals and Emkay Global.
Diversification Opportunities for Indian Metals and Emkay Global
0.62 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Indian and Emkay is 0.62. Overlapping area represents the amount of risk that can be diversified away by holding Indian Metals Ferro and Emkay Global Financial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Emkay Global Financial 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 Emkay Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Emkay Global Financial has no effect on the direction of Indian Metals i.e., Indian Metals and Emkay Global go up and down completely randomly.
Pair Corralation between Indian Metals and Emkay Global
Assuming the 90 days trading horizon Indian Metals Ferro is expected to under-perform the Emkay Global. In addition to that, Indian Metals is 1.25 times more volatile than Emkay Global Financial. It trades about -0.3 of its total potential returns per unit of risk. Emkay Global Financial is currently generating about -0.29 per unit of volatility. If you would invest 30,610 in Emkay Global Financial on November 3, 2024 and sell it today you would lose (5,535) from holding Emkay Global Financial or give up 18.08% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Indian Metals Ferro vs. Emkay Global Financial
Performance |
| Timeline |
| Indian Metals Ferro |
| Emkay Global Financial |
Indian Metals and Emkay Global Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Indian Metals and Emkay Global
The main advantage of trading using opposite Indian Metals and Emkay Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Indian Metals position performs unexpectedly, Emkay Global 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 Emkay Global will offset losses from the drop in Emkay Global's long position.| Indian Metals vs. Taj GVK Hotels | Indian Metals vs. Apollo Sindoori Hotels | Indian Metals vs. Viceroy Hotels Limited | Indian Metals vs. Beta Drugs |
| Emkay Global vs. Reliance Industries Limited | Emkay Global vs. Oil Natural Gas | Emkay Global vs. ICICI Bank Limited | Emkay Global vs. Bharti Airtel Limited |
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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
Other Complementary Tools
| Aroon Oscillator Analyze current equity momentum using Aroon Oscillator and other momentum ratios | |
| Portfolio Suggestion Get suggestions outside of your existing asset allocation including your own model portfolios | |
| Equity Valuation Check real value of public entities based on technical and fundamental data | |
| AI Portfolio Architect Use AI to generate optimal portfolios and find profitable investment opportunities | |
| Watchlist Optimization Optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm |