Correlation Between Manaksia Steels and Shyam Metalics

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

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

Diversification Opportunities for Manaksia Steels and Shyam Metalics

0.11

Correlation Coefficient

Manaksia Steels  Shyam Metalics

Average diversification

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

Pair Corralation between Manaksia Steels and Shyam Metalics

Assuming the 90 days trading horizon Manaksia Steels Limited is expected to under-perform the Shyam Metalics. In addition to that, Manaksia Steels is 1.93 times more volatile than Shyam Metalics and. It trades about -0.06 of its total potential returns per unit of risk. Shyam Metalics and is currently generating about 0.05 per unit of volatility. If you would invest  88,610  in Shyam Metalics and on April 25, 2025 and sell it today you would earn a total of  3,965  from holding Shyam Metalics and or generate 4.47% return on investment over 90 days.

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

Manaksia Steels Limited  vs.  Shyam Metalics and

Manaksia Steels

Risk-Adjusted Performance

Very Weak

Over the last 90 days Manaksia Steels Limited has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest uncertain performance, the Stock's technical and fundamental indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the firm private investors.

Shyam Metalics

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Shyam Metalics and are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of rather sound technical and fundamental indicators, Shyam Metalics is not utilizing all of its potentials. The newest stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with Manaksia Steels and Shyam Metalics

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

The idea behind Manaksia Steels Limited and Shyam Metalics and 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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.