Correlation Between METALL ZUG and Reliance Industries

Can any of the company-specific risk be diversified away by investing in both METALL ZUG and Reliance Industries 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 METALL ZUG and Reliance Industries into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between METALL ZUG AG and Reliance Industries Limited, you can compare the effects of market volatilities on METALL ZUG and Reliance Industries 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 METALL ZUG with a short position of Reliance Industries. Check out your portfolio center. Please also check ongoing floating volatility patterns of METALL ZUG and Reliance Industries.

Diversification Opportunities for METALL ZUG and Reliance Industries

0.53

Correlation Coefficient

METALL ZUG  Reliance Industries

Very weak diversification

The 3 months correlation between METALL and Reliance is 0.53. Overlapping area represents the amount of risk that can be diversified away by holding METALL ZUG AG and Reliance Industries Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Reliance Industries and METALL ZUG 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 METALL ZUG AG are associated (or correlated) with Reliance Industries. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Reliance Industries has no effect on the direction of METALL ZUG i.e., METALL ZUG and Reliance Industries go up and down completely randomly.

Pair Corralation between METALL ZUG and Reliance Industries

Assuming the 90 days trading horizon METALL ZUG is expected to generate 3.0 times less return on investment than Reliance Industries. But when comparing it to its historical volatility, METALL ZUG AG is 1.49 times less risky than Reliance Industries. It trades about 0.04 of its potential returns per unit of risk. Reliance Industries Limited is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest  6,070  in Reliance Industries Limited on April 24, 2025 and sell it today you would earn a total of  470.00  from holding Reliance Industries Limited or generate 7.74% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	100.0%
Values	Daily Returns

METALL ZUG AG  vs.  Reliance Industries Limited

METALL ZUG AG

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in METALL ZUG AG are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable basic indicators, METALL ZUG is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

Reliance Industries

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Reliance Industries Limited are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, Reliance Industries may actually be approaching a critical reversion point that can send shares even higher in August 2025.

Pair Trading with METALL ZUG and Reliance Industries

The main advantage of trading using opposite METALL ZUG and Reliance Industries positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if METALL ZUG position performs unexpectedly, Reliance Industries 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 Reliance Industries will offset losses from the drop in Reliance Industries' long position.

The idea behind METALL ZUG AG and Reliance Industries 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.

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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.