Correlation Between Asian Paints and ACUTAAS CHEMICALS

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

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

Diversification Opportunities for Asian Paints and ACUTAAS CHEMICALS

0.37

Correlation Coefficient

Asian Paints  ACUTAAS CHEMICALS

Weak diversification

The 3 months correlation between Asian and ACUTAAS is 0.37. Overlapping area represents the amount of risk that can be diversified away by holding Asian Paints Limited and ACUTAAS CHEMICALS LTD in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ACUTAAS CHEMICALS LTD and Asian Paints 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 Asian Paints Limited are associated (or correlated) with ACUTAAS CHEMICALS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ACUTAAS CHEMICALS LTD has no effect on the direction of Asian Paints i.e., Asian Paints and ACUTAAS CHEMICALS go up and down completely randomly.

Pair Corralation between Asian Paints and ACUTAAS CHEMICALS

Assuming the 90 days trading horizon Asian Paints Limited is expected to under-perform the ACUTAAS CHEMICALS. But the stock apears to be less risky and, when comparing its historical volatility, Asian Paints Limited is 1.52 times less risky than ACUTAAS CHEMICALS. The stock trades about -0.04 of its potential returns per unit of risk. The ACUTAAS CHEMICALS LTD is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest  112,450  in ACUTAAS CHEMICALS LTD on April 24, 2025 and sell it today you would earn a total of  5,310  from holding ACUTAAS CHEMICALS LTD or generate 4.72% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	58.73%
Values	Daily Returns

Asian Paints Limited  vs.  ACUTAAS CHEMICALS LTD

Asian Paints Limited

Risk-Adjusted Performance

Very Weak

Over the last 90 days Asian Paints Limited has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong forward indicators, Asian Paints is not utilizing all of its potentials. The newest stock price disturbance, may contribute to short-term losses for the investors.

ACUTAAS CHEMICALS LTD

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in ACUTAAS CHEMICALS LTD are ranked lower than 6 (%) 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.

Pair Trading with Asian Paints and ACUTAAS CHEMICALS

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

The idea behind Asian Paints Limited and ACUTAAS CHEMICALS LTD 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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .