Correlation Between ILFS Investment and Indian Metals
Can any of the company-specific risk be diversified away by investing in both ILFS Investment 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 ILFS Investment and Indian Metals into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ILFS Investment Managers and Indian Metals Ferro, you can compare the effects of market volatilities on ILFS Investment 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 ILFS Investment with a short position of Indian Metals. Check out your portfolio center. Please also check ongoing floating volatility patterns of ILFS Investment and Indian Metals.
Diversification Opportunities for ILFS Investment and Indian Metals
-0.03 | Correlation Coefficient |
Good diversification
The 3 months correlation between ILFS and Indian is -0.03. Overlapping area represents the amount of risk that can be diversified away by holding ILFS Investment Managers 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 ILFS Investment 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 ILFS Investment Managers 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 ILFS Investment i.e., ILFS Investment and Indian Metals go up and down completely randomly.
Pair Corralation between ILFS Investment and Indian Metals
Assuming the 90 days trading horizon ILFS Investment is expected to generate 4.22 times less return on investment than Indian Metals. But when comparing it to its historical volatility, ILFS Investment Managers is 1.01 times less risky than Indian Metals. It trades about 0.12 of its potential returns per unit of risk. Indian Metals Ferro is currently generating about 0.48 of returns per unit of risk over similar time horizon. 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 Against |
| Strength | Insignificant |
| Accuracy | 95.24% |
| Values | Daily Returns |
ILFS Investment Managers vs. Indian Metals Ferro
Performance |
| Timeline |
| ILFS Investment Managers |
| Indian Metals Ferro |
ILFS Investment and Indian Metals Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ILFS Investment and Indian Metals
The main advantage of trading using opposite ILFS Investment and Indian Metals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ILFS Investment 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.| ILFS Investment vs. Xchanging Solutions Limited | ILFS Investment vs. Kingfa Science Technology | ILFS Investment vs. Rico Auto Industries | ILFS Investment vs. GACM Technologies Limited |
| Indian Metals vs. NMDC Limited | Indian Metals vs. Steel Authority of | Indian Metals vs. Embassy Office Parks | Indian Metals vs. Gujarat Narmada Valley |
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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
Other Complementary Tools
| Portfolio Center All portfolio management and optimization tools to improve performance of your portfolios | |
| Equity Analysis Research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities | |
| Companies Directory Evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals | |
| Portfolio Backtesting Avoid under-diversification and over-optimization by backtesting your portfolios | |
| Correlation Analysis Reduce portfolio risk simply by holding instruments which are not perfectly correlated |