Correlation Between Niraj Ispat and Shaily Engineering

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Can any of the company-specific risk be diversified away by investing in both Niraj Ispat and Shaily Engineering 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 Niraj Ispat and Shaily Engineering into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Niraj Ispat Industries and Shaily Engineering Plastics, you can compare the effects of market volatilities on Niraj Ispat and Shaily Engineering 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 Niraj Ispat with a short position of Shaily Engineering. Check out your portfolio center. Please also check ongoing floating volatility patterns of Niraj Ispat and Shaily Engineering.

Diversification Opportunities for Niraj Ispat and Shaily Engineering

NirajShailyDiversified AwayNirajShailyDiversified Away100%
0.7
  Correlation Coefficient

Poor diversification

The 3 months correlation between Niraj and Shaily is 0.7. Overlapping area represents the amount of risk that can be diversified away by holding Niraj Ispat Industries and Shaily Engineering Plastics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shaily Engineering and Niraj Ispat 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 Niraj Ispat Industries are associated (or correlated) with Shaily Engineering. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shaily Engineering has no effect on the direction of Niraj Ispat i.e., Niraj Ispat and Shaily Engineering go up and down completely randomly.

Pair Corralation between Niraj Ispat and Shaily Engineering

Assuming the 90 days trading horizon Niraj Ispat Industries is expected to generate 0.07 times more return on investment than Shaily Engineering. However, Niraj Ispat Industries is 13.65 times less risky than Shaily Engineering. It trades about -0.22 of its potential returns per unit of risk. Shaily Engineering Plastics is currently generating about -0.03 per unit of risk. If you would invest  24,518  in Niraj Ispat Industries on November 1, 2024 and sell it today you would lose (285.00) from holding Niraj Ispat Industries or give up 1.16% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthSignificant
Accuracy100.0%
ValuesDaily Returns

Niraj Ispat Industries  vs.  Shaily Engineering Plastics

 Performance 
JavaScript chart by amCharts 3.21.15NovDec2025 10203040506070
JavaScript chart by amCharts 3.21.15NIRAJISPAT SHAILY
       Timeline  
Niraj Ispat Industries 

Risk-Adjusted Performance

12 of 100

 
Weak
 
Strong
Good
Compared to the overall equity markets, risk-adjusted returns on investments in Niraj Ispat Industries are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, Niraj Ispat unveiled solid returns over the last few months and may actually be approaching a breakup point.
JavaScript chart by amCharts 3.21.15NovDecJanDecJan215220225230235240245250255
Shaily Engineering 

Risk-Adjusted Performance

12 of 100

 
Weak
 
Strong
Good
Compared to the overall equity markets, risk-adjusted returns on investments in Shaily Engineering Plastics are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. Despite somewhat unfluctuating forward indicators, Shaily Engineering sustained solid returns over the last few months and may actually be approaching a breakup point.
JavaScript chart by amCharts 3.21.15NovDecJanDecJan1,0001,1001,2001,3001,4001,5001,600

Niraj Ispat and Shaily Engineering Volatility Contrast

   Predicted Return Density   
JavaScript chart by amCharts 3.21.15-3.86-2.89-1.92-0.950.01.012.063.14.145.19 0.050.100.150.200.25
JavaScript chart by amCharts 3.21.15NIRAJISPAT SHAILY
       Returns  

Pair Trading with Niraj Ispat and Shaily Engineering

The main advantage of trading using opposite Niraj Ispat and Shaily Engineering positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Niraj Ispat position performs unexpectedly, Shaily Engineering 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 Shaily Engineering will offset losses from the drop in Shaily Engineering's long position.
The idea behind Niraj Ispat Industries and Shaily Engineering Plastics 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 Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.

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