Correlation Between ACUTAAS CHEMICALS and Sudarshan Chemical

Can any of the company-specific risk be diversified away by investing in both ACUTAAS CHEMICALS and Sudarshan Chemical 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 ACUTAAS CHEMICALS and Sudarshan Chemical into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between ACUTAAS CHEMICALS LTD and Sudarshan Chemical Industries, you can compare the effects of market volatilities on ACUTAAS CHEMICALS and Sudarshan Chemical 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 ACUTAAS CHEMICALS with a short position of Sudarshan Chemical. Check out your portfolio center. Please also check ongoing floating volatility patterns of ACUTAAS CHEMICALS and Sudarshan Chemical.

Diversification Opportunities for ACUTAAS CHEMICALS and Sudarshan Chemical

-0.68

Correlation Coefficient

ACUTAAS CHEMICALS  Sudarshan Chemical

Excellent diversification

The 3 months correlation between ACUTAAS and Sudarshan is -0.68. Overlapping area represents the amount of risk that can be diversified away by holding ACUTAAS CHEMICALS LTD and Sudarshan Chemical Industries in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sudarshan Chemical and ACUTAAS CHEMICALS 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 ACUTAAS CHEMICALS LTD are associated (or correlated) with Sudarshan Chemical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sudarshan Chemical has no effect on the direction of ACUTAAS CHEMICALS i.e., ACUTAAS CHEMICALS and Sudarshan Chemical go up and down completely randomly.

Pair Corralation between ACUTAAS CHEMICALS and Sudarshan Chemical

Assuming the 90 days trading horizon ACUTAAS CHEMICALS is expected to generate 1.83 times less return on investment than Sudarshan Chemical. But when comparing it to its historical volatility, ACUTAAS CHEMICALS LTD is 1.36 times less risky than Sudarshan Chemical. It trades about 0.1 of its potential returns per unit of risk. Sudarshan Chemical Industries is currently generating about 0.14 of returns per unit of risk over similar time horizon. If you would invest  104,735  in Sudarshan Chemical Industries on April 23, 2025 and sell it today you would earn a total of  21,315  from holding Sudarshan Chemical Industries or generate 20.35% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	57.14%
Values	Daily Returns

ACUTAAS CHEMICALS LTD  vs.  Sudarshan Chemical Industries

ACUTAAS CHEMICALS LTD

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in ACUTAAS CHEMICALS LTD are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively weak basic indicators, ACUTAAS CHEMICALS may actually be approaching a critical reversion point that can send shares even higher in August 2025.

Sudarshan Chemical

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Sudarshan Chemical Industries are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. In spite of rather weak technical indicators, Sudarshan Chemical exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with ACUTAAS CHEMICALS and Sudarshan Chemical

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

The idea behind ACUTAAS CHEMICALS LTD and Sudarshan Chemical Industries 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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.