Correlation Between Garuda Construction and Sarthak Metals

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

Diversification Opportunities for Garuda Construction and Sarthak Metals

0.29

Correlation Coefficient

Garuda Construction  Sarthak Metals

Modest diversification

The 3 months correlation between Garuda and Sarthak is 0.29. Overlapping area represents the amount of risk that can be diversified away by holding Garuda Construction Engineerin and Sarthak Metals Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sarthak Metals 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 Sarthak Metals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sarthak Metals has no effect on the direction of Garuda Construction i.e., Garuda Construction and Sarthak Metals go up and down completely randomly.

Pair Corralation between Garuda Construction and Sarthak Metals

Assuming the 90 days trading horizon Garuda Construction is expected to generate 1.08 times less return on investment than Sarthak Metals. But when comparing it to its historical volatility, Garuda Construction Engineering is 1.16 times less risky than Sarthak Metals. It trades about 0.05 of its potential returns per unit of risk. Sarthak Metals Limited is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest  11,792  in Sarthak Metals Limited on March 23, 2025 and sell it today you would earn a total of  877.00  from holding Sarthak Metals Limited or generate 7.44% return on investment over 90 days.

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

Garuda Construction Engineerin  vs.  Sarthak Metals Limited

Garuda Construction

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Garuda Construction Engineering are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite somewhat unfluctuating basic indicators, Garuda Construction may actually be approaching a critical reversion point that can send shares even higher in July 2025.

Sarthak Metals

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Sarthak Metals Limited are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, Sarthak Metals unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Garuda Construction and Sarthak Metals

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

The idea behind Garuda Construction Engineering and Sarthak Metals 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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.