Correlation Between ITTEFAQ Iron and Air Link

Can any of the company-specific risk be diversified away by investing in both ITTEFAQ Iron and Air Link 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 ITTEFAQ Iron and Air Link into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between ITTEFAQ Iron Industries and Air Link Communication, you can compare the effects of market volatilities on ITTEFAQ Iron and Air Link 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 ITTEFAQ Iron with a short position of Air Link. Check out your portfolio center. Please also check ongoing floating volatility patterns of ITTEFAQ Iron and Air Link.

Diversification Opportunities for ITTEFAQ Iron and Air Link

-0.11

Correlation Coefficient

ITTEFAQ Iron  Air Link

Good diversification

The 3 months correlation between ITTEFAQ and Air is -0.11. Overlapping area represents the amount of risk that can be diversified away by holding ITTEFAQ Iron Industries and Air Link Communication in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Air Link Communication and ITTEFAQ Iron 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 ITTEFAQ Iron Industries are associated (or correlated) with Air Link. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Air Link Communication has no effect on the direction of ITTEFAQ Iron i.e., ITTEFAQ Iron and Air Link go up and down completely randomly.

Pair Corralation between ITTEFAQ Iron and Air Link

Assuming the 90 days trading horizon ITTEFAQ Iron Industries is expected to generate 1.34 times more return on investment than Air Link. However, ITTEFAQ Iron is 1.34 times more volatile than Air Link Communication. It trades about 0.07 of its potential returns per unit of risk. Air Link Communication is currently generating about -0.1 per unit of risk. If you would invest  775.00  in ITTEFAQ Iron Industries on April 21, 2025 and sell it today you would earn a total of  113.00  from holding ITTEFAQ Iron Industries or generate 14.58% return on investment over 90 days.

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

ITTEFAQ Iron Industries  vs.  Air Link Communication

ITTEFAQ Iron Industries

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in ITTEFAQ Iron Industries are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Even with relatively weak technical and fundamental indicators, ITTEFAQ Iron reported solid returns over the last few months and may actually be approaching a breakup point.

Air Link Communication

Risk-Adjusted Performance

Very Weak

Over the last 90 days Air Link Communication has generated negative risk-adjusted returns adding no value to investors with long positions. Despite conflicting performance in the last few months, the Stock's forward indicators remain quite persistent which may send shares a bit higher in August 2025. The latest mess may also be a sign of long-standing up-swing for the company institutional investors.

Pair Trading with ITTEFAQ Iron and Air Link

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

The idea behind ITTEFAQ Iron Industries and Air Link Communication 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.

Check out your portfolio center.

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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .