Correlation Between Dhanuka Agritech and Automotive Stampings

Can any of the company-specific risk be diversified away by investing in both Dhanuka Agritech and Automotive Stampings 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 Dhanuka Agritech and Automotive Stampings into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Dhanuka Agritech Limited and Automotive Stampings and, you can compare the effects of market volatilities on Dhanuka Agritech and Automotive Stampings 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 Dhanuka Agritech with a short position of Automotive Stampings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dhanuka Agritech and Automotive Stampings.

Diversification Opportunities for Dhanuka Agritech and Automotive Stampings

0.46

Correlation Coefficient

Dhanuka Agritech  Automotive Stampings

Very weak diversification

The 3 months correlation between Dhanuka and Automotive is 0.46. Overlapping area represents the amount of risk that can be diversified away by holding Dhanuka Agritech Limited and Automotive Stampings and in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Automotive Stampings and and Dhanuka Agritech 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 Dhanuka Agritech Limited are associated (or correlated) with Automotive Stampings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Automotive Stampings and has no effect on the direction of Dhanuka Agritech i.e., Dhanuka Agritech and Automotive Stampings go up and down completely randomly.

Pair Corralation between Dhanuka Agritech and Automotive Stampings

Assuming the 90 days trading horizon Dhanuka Agritech Limited is expected to generate 0.74 times more return on investment than Automotive Stampings. However, Dhanuka Agritech Limited is 1.35 times less risky than Automotive Stampings. It trades about 0.08 of its potential returns per unit of risk. Automotive Stampings and is currently generating about 0.04 per unit of risk. If you would invest  75,735  in Dhanuka Agritech Limited on April 1, 2025 and sell it today you would earn a total of  98,975  from holding Dhanuka Agritech Limited or generate 130.69% return on investment over 90 days.

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

Dhanuka Agritech Limited  vs.  Automotive Stampings and

Dhanuka Agritech

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Dhanuka Agritech Limited are ranked lower than 17 (%) of all global equities and portfolios over the last 90 days. Despite somewhat uncertain basic indicators, Dhanuka Agritech sustained solid returns over the last few months and may actually be approaching a breakup point.

Automotive Stampings and

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Automotive Stampings and are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively unsteady basic indicators, Automotive Stampings unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Dhanuka Agritech and Automotive Stampings

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

The idea behind Dhanuka Agritech Limited and Automotive Stampings and 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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.