Correlation Between Max Financial and India Tourism

Can any of the company-specific risk be diversified away by investing in both Max Financial and India Tourism 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 Max Financial and India Tourism into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Max Financial Services and India Tourism Development, you can compare the effects of market volatilities on Max Financial and India Tourism 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 Max Financial with a short position of India Tourism. Check out your portfolio center. Please also check ongoing floating volatility patterns of Max Financial and India Tourism.

Diversification Opportunities for Max Financial and India Tourism

0.53

Correlation Coefficient

Max Financial  India Tourism

Very weak diversification

The 3 months correlation between Max and India is 0.53. Overlapping area represents the amount of risk that can be diversified away by holding Max Financial Services and India Tourism Development in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on India Tourism Development and Max Financial 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 Max Financial Services are associated (or correlated) with India Tourism. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of India Tourism Development has no effect on the direction of Max Financial i.e., Max Financial and India Tourism go up and down completely randomly.

Pair Corralation between Max Financial and India Tourism

Assuming the 90 days trading horizon Max Financial Services is expected to generate 0.73 times more return on investment than India Tourism. However, Max Financial Services is 1.37 times less risky than India Tourism. It trades about 0.28 of its potential returns per unit of risk. India Tourism Development is currently generating about 0.02 per unit of risk. If you would invest  123,740  in Max Financial Services on April 20, 2025 and sell it today you would earn a total of  30,170  from holding Max Financial Services or generate 24.38% return on investment over 90 days.

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

Max Financial Services  vs.  India Tourism Development

Max Financial Services

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Max Financial Services are ranked lower than 22 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, Max Financial unveiled solid returns over the last few months and may actually be approaching a breakup point.

India Tourism Development

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in India Tourism Development are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable basic indicators, India Tourism is not utilizing all of its potentials. The current stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Max Financial and India Tourism

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

The idea behind Max Financial Services and India Tourism Development 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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.