Correlation Between Consolidated Construction and Manaksia Coated

Can any of the company-specific risk be diversified away by investing in both Consolidated Construction and Manaksia Coated 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 Consolidated Construction and Manaksia Coated into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Consolidated Construction Consortium and Manaksia Coated Metals, you can compare the effects of market volatilities on Consolidated Construction and Manaksia Coated 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 Consolidated Construction with a short position of Manaksia Coated. Check out your portfolio center. Please also check ongoing floating volatility patterns of Consolidated Construction and Manaksia Coated.

Diversification Opportunities for Consolidated Construction and Manaksia Coated

0.48

Correlation Coefficient

Consolidated Construction  Manaksia Coated

Very weak diversification

The 3 months correlation between Consolidated and Manaksia is 0.48. Overlapping area represents the amount of risk that can be diversified away by holding Consolidated Construction Cons and Manaksia Coated Metals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Manaksia Coated Metals and Consolidated Construction 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 Consolidated Construction Consortium are associated (or correlated) with Manaksia Coated. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Manaksia Coated Metals has no effect on the direction of Consolidated Construction i.e., Consolidated Construction and Manaksia Coated go up and down completely randomly.

Pair Corralation between Consolidated Construction and Manaksia Coated

Assuming the 90 days trading horizon Consolidated Construction is expected to generate 1.37 times less return on investment than Manaksia Coated. In addition to that, Consolidated Construction is 1.26 times more volatile than Manaksia Coated Metals. It trades about 0.16 of its total potential returns per unit of risk. Manaksia Coated Metals is currently generating about 0.27 per unit of volatility. If you would invest  8,099  in Manaksia Coated Metals on March 24, 2025 and sell it today you would earn a total of  4,757  from holding Manaksia Coated Metals or generate 58.74% return on investment over 90 days.

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

Consolidated Construction Cons  vs.  Manaksia Coated Metals

Consolidated Construction

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Consolidated Construction Consortium are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively weak basic indicators, Consolidated Construction unveiled solid returns over the last few months and may actually be approaching a breakup point.

Manaksia Coated Metals

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Manaksia Coated Metals are ranked lower than 21 (%) of all global equities and portfolios over the last 90 days. In spite of very unsteady basic indicators, Manaksia Coated displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Consolidated Construction and Manaksia Coated

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

The idea behind Consolidated Construction Consortium and Manaksia Coated Metals 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 Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.