Correlation Between Prakash Steelage and Golden Tobacco

Specify exactly 2 symbols:
Can any of the company-specific risk be diversified away by investing in both Prakash Steelage and Golden Tobacco 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 Prakash Steelage and Golden Tobacco into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Prakash Steelage Limited and Golden Tobacco Limited, you can compare the effects of market volatilities on Prakash Steelage and Golden Tobacco 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 Prakash Steelage with a short position of Golden Tobacco. Check out your portfolio center. Please also check ongoing floating volatility patterns of Prakash Steelage and Golden Tobacco.

Diversification Opportunities for Prakash Steelage and Golden Tobacco

0.58
  Correlation Coefficient

Very weak diversification

The 3 months correlation between Prakash and Golden is 0.58. Overlapping area represents the amount of risk that can be diversified away by holding Prakash Steelage Limited and Golden Tobacco Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Golden Tobacco and Prakash Steelage 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 Prakash Steelage Limited are associated (or correlated) with Golden Tobacco. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Golden Tobacco has no effect on the direction of Prakash Steelage i.e., Prakash Steelage and Golden Tobacco go up and down completely randomly.

Pair Corralation between Prakash Steelage and Golden Tobacco

Assuming the 90 days trading horizon Prakash Steelage Limited is expected to under-perform the Golden Tobacco. In addition to that, Prakash Steelage is 1.02 times more volatile than Golden Tobacco Limited. It trades about -0.15 of its total potential returns per unit of risk. Golden Tobacco Limited is currently generating about -0.14 per unit of volatility. If you would invest  4,160  in Golden Tobacco Limited on October 16, 2024 and sell it today you would lose (357.00) from holding Golden Tobacco Limited or give up 8.58% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthWeak
Accuracy100.0%
ValuesDaily Returns

Prakash Steelage Limited  vs.  Golden Tobacco Limited

 Performance 
       Timeline  
Prakash Steelage 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days Prakash Steelage Limited has generated negative risk-adjusted returns adding no value to investors with long positions. Despite inconsistent performance in the last few months, the Stock's basic indicators remain fairly strong which may send shares a bit higher in February 2025. The recent confusion may also be a sign of long-lasting up-swing for the firm traders.
Golden Tobacco 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days Golden Tobacco Limited has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest uncertain performance, the Stock's basic indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the firm private investors.

Prakash Steelage and Golden Tobacco Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Prakash Steelage and Golden Tobacco

The main advantage of trading using opposite Prakash Steelage and Golden Tobacco positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Prakash Steelage position performs unexpectedly, Golden Tobacco 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 Golden Tobacco will offset losses from the drop in Golden Tobacco's long position.
Prakash Steelage vs. Advani Hotels Resorts
Prakash Steelage vs. Transport of
Prakash Steelage vs. Apollo Sindoori Hotels
Prakash Steelage vs. Blue Coast Hotels
The idea behind Prakash Steelage Limited and Golden Tobacco Limited 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.
Golden Tobacco vs. BF Investment Limited
Golden Tobacco vs. Network18 Media Investments
Golden Tobacco vs. Tube Investments of
Golden Tobacco vs. Cholamandalam Investment 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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.

Other Complementary Tools

FinTech Suite
Use AI to screen and filter profitable investment opportunities
Odds Of Bankruptcy
Get analysis of equity chance of financial distress in the next 2 years
Idea Optimizer
Use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio
Money Managers
Screen money managers from public funds and ETFs managed around the world
Equity Search
Search for actively traded equities including funds and ETFs from over 30 global markets


 
Macroaxis helps investors of all levels and skills to maximize the upside of all their holdings and minimize the risk associated with market volatility, economic swings, and company-specific events. View terms and conditions
 
Feedback Blog
Made with optimal in San Francisco
2024 Macroaxis LLC
COMMON DESTINATIONS
MAIN CATEGORIES
COMPANY