Correlation Between Poly Medicure and Sukhjit Starch

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

Diversification Opportunities for Poly Medicure and Sukhjit Starch

0.83
  Correlation Coefficient

Very poor diversification

The 3 months correlation between Poly and Sukhjit is 0.83. Overlapping area represents the amount of risk that can be diversified away by holding Poly Medicure Limited and Sukhjit Starch Chemicals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sukhjit Starch Chemicals and Poly Medicure 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 Poly Medicure Limited are associated (or correlated) with Sukhjit Starch. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sukhjit Starch Chemicals has no effect on the direction of Poly Medicure i.e., Poly Medicure and Sukhjit Starch go up and down completely randomly.

Pair Corralation between Poly Medicure and Sukhjit Starch

Assuming the 90 days trading horizon Poly Medicure Limited is expected to generate 1.11 times more return on investment than Sukhjit Starch. However, Poly Medicure is 1.11 times more volatile than Sukhjit Starch Chemicals. It trades about 0.0 of its potential returns per unit of risk. Sukhjit Starch Chemicals is currently generating about -0.06 per unit of risk. If you would invest  233,545  in Poly Medicure Limited on November 28, 2024 and sell it today you would lose (15,410) from holding Poly Medicure Limited or give up 6.6% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthStrong
Accuracy98.4%
ValuesDaily Returns

Poly Medicure Limited  vs.  Sukhjit Starch Chemicals

 Performance 
       Timeline  
Poly Medicure Limited 

Risk-Adjusted Performance

Very Weak

 
Weak
 
Strong
Over the last 90 days Poly Medicure Limited has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Stock's primary indicators remain rather sound which may send shares a bit higher in March 2025. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.
Sukhjit Starch Chemicals 

Risk-Adjusted Performance

Very Weak

 
Weak
 
Strong
Over the last 90 days Sukhjit Starch Chemicals has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of uncertain performance in the last few months, the Stock's forward indicators remain comparatively stable which may send shares a bit higher in March 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Poly Medicure and Sukhjit Starch Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Poly Medicure and Sukhjit Starch

The main advantage of trading using opposite Poly Medicure and Sukhjit Starch positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Poly Medicure position performs unexpectedly, Sukhjit Starch 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 Sukhjit Starch will offset losses from the drop in Sukhjit Starch's long position.
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The idea behind Poly Medicure Limited and Sukhjit Starch Chemicals 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.
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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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.

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