Correlation Between Ratnamani Metals and Fortis Healthcare

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

Diversification Opportunities for Ratnamani Metals and Fortis Healthcare

RatnamaniFortisDiversified AwayRatnamaniFortisDiversified Away100%
0.84
  Correlation Coefficient

Very poor diversification

The 3 months correlation between Ratnamani and Fortis is 0.84. Overlapping area represents the amount of risk that can be diversified away by holding Ratnamani Metals Tubes and Fortis Healthcare Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fortis Healthcare and Ratnamani Metals 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 Ratnamani Metals Tubes are associated (or correlated) with Fortis Healthcare. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fortis Healthcare has no effect on the direction of Ratnamani Metals i.e., Ratnamani Metals and Fortis Healthcare go up and down completely randomly.

Pair Corralation between Ratnamani Metals and Fortis Healthcare

Assuming the 90 days trading horizon Ratnamani Metals Tubes is expected to under-perform the Fortis Healthcare. But the stock apears to be less risky and, when comparing its historical volatility, Ratnamani Metals Tubes is 1.03 times less risky than Fortis Healthcare. The stock trades about -0.07 of its potential returns per unit of risk. The Fortis Healthcare Limited is currently generating about -0.03 of returns per unit of risk over similar time horizon. If you would invest  61,455  in Fortis Healthcare Limited on December 14, 2024 and sell it today you would lose (910.00) from holding Fortis Healthcare Limited or give up 1.48% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthStrong
Accuracy100.0%
ValuesDaily Returns

Ratnamani Metals Tubes  vs.  Fortis Healthcare Limited

 Performance 
JavaScript chart by amCharts 3.21.15Dec2025Feb -30-25-20-15-10-50
JavaScript chart by amCharts 3.21.15RATNAMANI FORTIS
       Timeline  
Ratnamani Metals Tubes 

Risk-Adjusted Performance

Very Weak

 
Weak
 
Strong
Over the last 90 days Ratnamani Metals Tubes has generated negative risk-adjusted returns adding no value to investors with long positions. Despite unsteady performance in the last few months, the Stock's basic indicators remain somewhat strong which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long term up-swing for the company investors.
JavaScript chart by amCharts 3.21.15JanFebMarFebMar2,4002,6002,8003,0003,2003,400
Fortis Healthcare 

Risk-Adjusted Performance

Very Weak

 
Weak
 
Strong
Over the last 90 days Fortis Healthcare Limited has generated negative risk-adjusted returns adding no value to investors with long positions. Despite uncertain performance in the last few months, the Stock's basic indicators remain somewhat strong which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long term up-swing for the company investors.
JavaScript chart by amCharts 3.21.15JanFebMarFebMar600650700750

Ratnamani Metals and Fortis Healthcare Volatility Contrast

   Predicted Return Density   
JavaScript chart by amCharts 3.21.15-3.06-2.32-1.59-0.85-0.110.481.061.642.222.8 0.060.080.100.120.14
JavaScript chart by amCharts 3.21.15RATNAMANI FORTIS
       Returns  

Pair Trading with Ratnamani Metals and Fortis Healthcare

The main advantage of trading using opposite Ratnamani Metals and Fortis Healthcare positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ratnamani Metals position performs unexpectedly, Fortis Healthcare 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 Fortis Healthcare will offset losses from the drop in Fortis Healthcare's long position.
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The idea behind Ratnamani Metals Tubes and Fortis Healthcare 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.
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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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.

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