Correlation Between Punjab National and Sarthak Metals
Can any of the company-specific risk be diversified away by investing in both Punjab National and Sarthak 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 Punjab National and Sarthak Metals into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Punjab National Bank and Sarthak Metals Limited, you can compare the effects of market volatilities on Punjab National and Sarthak 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 Punjab National with a short position of Sarthak Metals. Check out your portfolio center. Please also check ongoing floating volatility patterns of Punjab National and Sarthak Metals.
Diversification Opportunities for Punjab National and Sarthak Metals
-0.06 | Correlation Coefficient |
Good diversification
The 3 months correlation between Punjab and Sarthak is -0.06. Overlapping area represents the amount of risk that can be diversified away by holding Punjab National Bank and Sarthak Metals Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sarthak Metals and Punjab National 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 Punjab National Bank are associated (or correlated) with Sarthak Metals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sarthak Metals has no effect on the direction of Punjab National i.e., Punjab National and Sarthak Metals go up and down completely randomly.
Pair Corralation between Punjab National and Sarthak Metals
Assuming the 90 days trading horizon Punjab National Bank is expected to generate 0.56 times more return on investment than Sarthak Metals. However, Punjab National Bank is 1.8 times less risky than Sarthak Metals. It trades about -0.25 of its potential returns per unit of risk. Sarthak Metals Limited is currently generating about -0.16 per unit of risk. If you would invest 10,818 in Punjab National Bank on October 15, 2024 and sell it today you would lose (954.00) from holding Punjab National Bank or give up 8.82% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.0% |
| Values | Daily Returns |
Punjab National Bank vs. Sarthak Metals Limited
Performance |
| Timeline |
| Punjab National Bank |
| Sarthak Metals |
Punjab National and Sarthak Metals Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Punjab National and Sarthak Metals
The main advantage of trading using opposite Punjab National and Sarthak Metals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Punjab National position performs unexpectedly, Sarthak 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 Sarthak Metals will offset losses from the drop in Sarthak Metals' long position.| Punjab National vs. Kaynes Technology India | Punjab National vs. Mangalore Chemicals Fertilizers | Punjab National vs. TECIL Chemicals and | Punjab National vs. JGCHEMICALS LIMITED |
| Sarthak Metals vs. Spandana Sphoorty Financial | Sarthak Metals vs. Emkay Global Financial | Sarthak Metals vs. Punjab National Bank | Sarthak Metals vs. TECIL 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 CEOs Directory module to screen CEOs from public companies around the world.
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