Correlation Between Khaitan Chemicals and Manaksia Steels
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By analyzing existing cross correlation between Khaitan Chemicals Fertilizers and Manaksia Steels Limited, you can compare the effects of market volatilities on Khaitan Chemicals and Manaksia Steels 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 Khaitan Chemicals with a short position of Manaksia Steels. Check out your portfolio center. Please also check ongoing floating volatility patterns of Khaitan Chemicals and Manaksia Steels.
Diversification Opportunities for Khaitan Chemicals and Manaksia Steels
0.76 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Khaitan and Manaksia is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding Khaitan Chemicals Fertilizers and Manaksia Steels Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Manaksia Steels and Khaitan Chemicals 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 Khaitan Chemicals Fertilizers are associated (or correlated) with Manaksia Steels. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Manaksia Steels has no effect on the direction of Khaitan Chemicals i.e., Khaitan Chemicals and Manaksia Steels go up and down completely randomly.
Pair Corralation between Khaitan Chemicals and Manaksia Steels
Assuming the 90 days trading horizon Khaitan Chemicals Fertilizers is expected to under-perform the Manaksia Steels. In addition to that, Khaitan Chemicals is 1.13 times more volatile than Manaksia Steels Limited. It trades about -0.11 of its total potential returns per unit of risk. Manaksia Steels Limited is currently generating about -0.07 per unit of volatility. If you would invest 6,767 in Manaksia Steels Limited on November 23, 2024 and sell it today you would lose (1,440) from holding Manaksia Steels Limited or give up 21.28% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Significant |
Accuracy | 100.0% |
Values | Daily Returns |
Khaitan Chemicals Fertilizers vs. Manaksia Steels Limited
Performance |
Timeline |
Khaitan Chemicals |
Manaksia Steels |
Khaitan Chemicals and Manaksia Steels Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Khaitan Chemicals and Manaksia Steels
The main advantage of trading using opposite Khaitan Chemicals and Manaksia Steels positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Khaitan Chemicals position performs unexpectedly, Manaksia Steels 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 Manaksia Steels will offset losses from the drop in Manaksia Steels' long position.Khaitan Chemicals vs. Som Distilleries Breweries | ||
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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 Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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