Correlation Between Ratnamani Metals and Khaitan Chemicals

Specify exactly 2 symbols:
Can any of the company-specific risk be diversified away by investing in both Ratnamani Metals and Khaitan Chemicals 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 Khaitan Chemicals 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 Khaitan Chemicals Fertilizers, you can compare the effects of market volatilities on Ratnamani Metals and Khaitan Chemicals 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 Khaitan Chemicals. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ratnamani Metals and Khaitan Chemicals.

Diversification Opportunities for Ratnamani Metals and Khaitan Chemicals

RatnamaniKhaitanDiversified AwayRatnamaniKhaitanDiversified Away100%
0.72
  Correlation Coefficient

Poor diversification

The 3 months correlation between Ratnamani and Khaitan is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding Ratnamani Metals Tubes and Khaitan Chemicals Fertilizers in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Khaitan Chemicals 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 Khaitan Chemicals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Khaitan Chemicals has no effect on the direction of Ratnamani Metals i.e., Ratnamani Metals and Khaitan Chemicals go up and down completely randomly.

Pair Corralation between Ratnamani Metals and Khaitan Chemicals

Assuming the 90 days trading horizon Ratnamani Metals Tubes is expected to generate 0.64 times more return on investment than Khaitan Chemicals. However, Ratnamani Metals Tubes is 1.57 times less risky than Khaitan Chemicals. It trades about -0.28 of its potential returns per unit of risk. Khaitan Chemicals Fertilizers is currently generating about -0.27 per unit of risk. If you would invest  285,745  in Ratnamani Metals Tubes on November 25, 2024 and sell it today you would lose (35,680) from holding Ratnamani Metals Tubes or give up 12.49% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthSignificant
Accuracy100.0%
ValuesDaily Returns

Ratnamani Metals Tubes  vs.  Khaitan Chemicals Fertilizers

 Performance 
JavaScript chart by amCharts 3.21.15Dec2025Feb -20-10010
JavaScript chart by amCharts 3.21.15RATNAMANI KHAICHEM
       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 weak performance in the last few months, the Stock's basic indicators remain somewhat strong which may send shares a bit higher in March 2025. The current disturbance may also be a sign of long term up-swing for the company investors.
JavaScript chart by amCharts 3.21.15DecJanFebJanFeb2,4002,6002,8003,0003,2003,400
Khaitan Chemicals 

Risk-Adjusted Performance

Very Weak

 
Weak
 
Strong
Over the last 90 days Khaitan Chemicals Fertilizers 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 technical 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.
JavaScript chart by amCharts 3.21.15DecJanFebJanFeb556065707580

Ratnamani Metals and Khaitan Chemicals Volatility Contrast

   Predicted Return Density   
JavaScript chart by amCharts 3.21.15-3.23-2.42-1.61-0.80.00.621.251.882.51 0.040.060.080.100.12
JavaScript chart by amCharts 3.21.15RATNAMANI KHAICHEM
       Returns  

Pair Trading with Ratnamani Metals and Khaitan Chemicals

The main advantage of trading using opposite Ratnamani Metals and Khaitan Chemicals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ratnamani Metals position performs unexpectedly, Khaitan Chemicals 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 Khaitan Chemicals will offset losses from the drop in Khaitan Chemicals' long position.
The idea behind Ratnamani Metals Tubes and Khaitan Chemicals Fertilizers 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 CEOs Directory module to screen CEOs from public companies around the world.

Other Complementary Tools

Portfolio Dashboard
Portfolio dashboard that provides centralized access to all your investments
Companies Directory
Evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals
Investing Opportunities
Build portfolios using our predefined set of ideas and optimize them against your investing preferences
Portfolio Manager
State of the art Portfolio Manager to monitor and improve performance of your invested capital
Headlines Timeline
Stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity