Correlation Between STEEL EXCHANGE and Agro Phos

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

Diversification Opportunities for STEEL EXCHANGE and Agro Phos

0.64
  Correlation Coefficient

Poor diversification

The 3 months correlation between STEEL and Agro is 0.64. Overlapping area represents the amount of risk that can be diversified away by holding STEEL EXCHANGE INDIA and Agro Phos India in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Agro Phos India and STEEL EXCHANGE 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 STEEL EXCHANGE INDIA are associated (or correlated) with Agro Phos. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Agro Phos India has no effect on the direction of STEEL EXCHANGE i.e., STEEL EXCHANGE and Agro Phos go up and down completely randomly.

Pair Corralation between STEEL EXCHANGE and Agro Phos

Assuming the 90 days trading horizon STEEL EXCHANGE INDIA is expected to generate 0.5 times more return on investment than Agro Phos. However, STEEL EXCHANGE INDIA is 1.98 times less risky than Agro Phos. It trades about 0.61 of its potential returns per unit of risk. Agro Phos India is currently generating about 0.11 per unit of risk. If you would invest  1,013  in STEEL EXCHANGE INDIA on September 14, 2024 and sell it today you would earn a total of  106.00  from holding STEEL EXCHANGE INDIA or generate 10.46% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthSignificant
Accuracy100.0%
ValuesDaily Returns

STEEL EXCHANGE INDIA  vs.  Agro Phos India

 Performance 
       Timeline  
STEEL EXCHANGE INDIA 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days STEEL EXCHANGE INDIA 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 forward indicators remain fairly strong which may send shares a bit higher in January 2025. The recent confusion may also be a sign of long-lasting up-swing for the firm traders.
Agro Phos India 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days Agro Phos India has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy technical indicators, Agro Phos is not utilizing all of its potentials. The current stock price disarray, may contribute to short-term losses for the investors.

STEEL EXCHANGE and Agro Phos Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with STEEL EXCHANGE and Agro Phos

The main advantage of trading using opposite STEEL EXCHANGE and Agro Phos positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if STEEL EXCHANGE position performs unexpectedly, Agro Phos 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 Agro Phos will offset losses from the drop in Agro Phos' long position.
STEEL EXCHANGE vs. NMDC Limited
STEEL EXCHANGE vs. Steel Authority of
STEEL EXCHANGE vs. Embassy Office Parks
STEEL EXCHANGE vs. Gujarat Narmada Valley
The idea behind STEEL EXCHANGE INDIA and Agro Phos India 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.
Agro Phos vs. MAS Financial Services
Agro Phos vs. Karur Vysya Bank
Agro Phos vs. Hybrid Financial Services
Agro Phos vs. Life Insurance
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 Portfolio Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.

Other Complementary Tools

Bond Analysis
Evaluate and analyze corporate bonds as a potential investment for your portfolios.
Portfolio Analyzer
Portfolio analysis module that provides access to portfolio diagnostics and optimization engine
Global Correlations
Find global opportunities by holding instruments from different markets
Idea Optimizer
Use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio
Bonds Directory
Find actively traded corporate debentures issued by US companies


 
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