Correlation Between Garuda Construction and Ratnamani Metals

Can any of the company-specific risk be diversified away by investing in both Garuda Construction and Ratnamani Metals 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 Ratnamani Metals 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 Ratnamani Metals Tubes, you can compare the effects of market volatilities on Garuda Construction and Ratnamani Metals 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 Ratnamani Metals. Check out your portfolio center. Please also check ongoing floating volatility patterns of Garuda Construction and Ratnamani Metals.

Diversification Opportunities for Garuda Construction and Ratnamani Metals

0.56

Correlation Coefficient

Garuda Construction  Ratnamani Metals

Very weak diversification

The 3 months correlation between Garuda and Ratnamani is 0.56. Overlapping area represents the amount of risk that can be diversified away by holding Garuda Construction Engineerin and Ratnamani Metals Tubes in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ratnamani Metals Tubes 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 Ratnamani Metals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ratnamani Metals Tubes has no effect on the direction of Garuda Construction i.e., Garuda Construction and Ratnamani Metals go up and down completely randomly.

Pair Corralation between Garuda Construction and Ratnamani Metals

Assuming the 90 days trading horizon Garuda Construction Engineering is expected to generate 2.82 times more return on investment than Ratnamani Metals. However, Garuda Construction is 2.82 times more volatile than Ratnamani Metals Tubes. It trades about 0.09 of its potential returns per unit of risk. Ratnamani Metals Tubes is currently generating about 0.13 per unit of risk. If you would invest  10,591  in Garuda Construction Engineering on March 27, 2025 and sell it today you would earn a total of  1,885  from holding Garuda Construction Engineering or generate 17.8% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	98.33%
Values	Daily Returns

Garuda Construction Engineerin  vs.  Ratnamani Metals Tubes

Garuda Construction

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Garuda Construction Engineering are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Despite somewhat unsteady basic indicators, Garuda Construction sustained solid returns over the last few months and may actually be approaching a breakup point.

Ratnamani Metals Tubes

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Ratnamani Metals Tubes are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Ratnamani Metals may actually be approaching a critical reversion point that can send shares even higher in July 2025.

Pair Trading with Garuda Construction and Ratnamani Metals

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

The idea behind Garuda Construction Engineering and Ratnamani Metals Tubes 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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.