Correlation Between Garuda Construction and Hi Tech

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

By analyzing existing cross correlation between Garuda Construction Engineering and Hi Tech Pipes Limited, you can compare the effects of market volatilities on Garuda Construction and Hi Tech 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 Garuda Construction with a short position of Hi Tech. Check out your portfolio center. Please also check ongoing floating volatility patterns of Garuda Construction and Hi Tech.

Diversification Opportunities for Garuda Construction and Hi Tech

0.43

Correlation Coefficient

Garuda Construction  Hi Tech

Very weak diversification

The 3 months correlation between Garuda and HITECH is 0.43. Overlapping area represents the amount of risk that can be diversified away by holding Garuda Construction Engineerin and Hi Tech Pipes Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hi Tech Pipes and Garuda 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 Garuda Construction Engineering are associated (or correlated) with Hi Tech. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hi Tech Pipes has no effect on the direction of Garuda Construction i.e., Garuda Construction and Hi Tech go up and down completely randomly.

Pair Corralation between Garuda Construction and Hi Tech

Assuming the 90 days trading horizon Garuda Construction Engineering is expected to generate 1.95 times more return on investment than Hi Tech. However, Garuda Construction is 1.95 times more volatile than Hi Tech Pipes Limited. It trades about 0.22 of its potential returns per unit of risk. Hi Tech Pipes Limited is currently generating about -0.01 per unit of risk. If you would invest  11,053  in Garuda Construction Engineering on April 24, 2025 and sell it today you would earn a total of  7,811  from holding Garuda Construction Engineering or generate 70.67% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	98.44%
Values	Daily Returns

Garuda Construction Engineerin  vs.  Hi Tech Pipes Limited

Garuda Construction

Risk-Adjusted Performance

Good

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

Hi Tech Pipes

Risk-Adjusted Performance

Very Weak

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

Pair Trading with Garuda Construction and Hi Tech

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

The idea behind Garuda Construction Engineering and Hi Tech Pipes 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.

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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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.