Correlation Between Manaksia Coated and Black Box

Can any of the company-specific risk be diversified away by investing in both Manaksia Coated and Black Box 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 Manaksia Coated and Black Box into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Manaksia Coated Metals and Black Box Limited, you can compare the effects of market volatilities on Manaksia Coated and Black Box 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 Manaksia Coated with a short position of Black Box. Check out your portfolio center. Please also check ongoing floating volatility patterns of Manaksia Coated and Black Box.

Diversification Opportunities for Manaksia Coated and Black Box

0.83

Correlation Coefficient

Manaksia Coated  Black Box

Very poor diversification

The 3 months correlation between Manaksia and Black is 0.83. Overlapping area represents the amount of risk that can be diversified away by holding Manaksia Coated Metals and Black Box Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Black Box Limited and Manaksia Coated 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 Manaksia Coated Metals are associated (or correlated) with Black Box. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Black Box Limited has no effect on the direction of Manaksia Coated i.e., Manaksia Coated and Black Box go up and down completely randomly.

Pair Corralation between Manaksia Coated and Black Box

Assuming the 90 days trading horizon Manaksia Coated is expected to generate 1.07 times less return on investment than Black Box. But when comparing it to its historical volatility, Manaksia Coated Metals is 1.25 times less risky than Black Box. It trades about 0.23 of its potential returns per unit of risk. Black Box Limited is currently generating about 0.2 of returns per unit of risk over similar time horizon. If you would invest  36,730  in Black Box Limited on April 4, 2025 and sell it today you would earn a total of  18,210  from holding Black Box Limited or generate 49.58% return on investment over 90 days.

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

Manaksia Coated Metals  vs.  Black Box Limited

Manaksia Coated Metals

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Manaksia Coated Metals are ranked lower than 18 (%) of all global equities and portfolios over the last 90 days. In spite of very weak basic indicators, Manaksia Coated displayed solid returns over the last few months and may actually be approaching a breakup point.

Black Box Limited

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Black Box Limited are ranked lower than 15 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively weak basic indicators, Black Box unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Manaksia Coated and Black Box

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

The idea behind Manaksia Coated Metals and Black Box 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 CEOs Directory module to screen CEOs from public companies around the world.