Correlation Between Shivalik Bimetal and Sarthak Metals

Can any of the company-specific risk be diversified away by investing in both Shivalik Bimetal 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 Shivalik Bimetal and Sarthak Metals into the same portfolio, which is an essential part of the fundamental portfolio management process.

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

Diversification Opportunities for Shivalik Bimetal and Sarthak Metals

0.2

Correlation Coefficient

Shivalik Bimetal  Sarthak Metals

Modest diversification

The 3 months correlation between Shivalik and Sarthak is 0.2. Overlapping area represents the amount of risk that can be diversified away by holding Shivalik Bimetal Controls and Sarthak Metals Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sarthak Metals and Shivalik Bimetal 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 Shivalik Bimetal Controls 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 Shivalik Bimetal i.e., Shivalik Bimetal and Sarthak Metals go up and down completely randomly.

Pair Corralation between Shivalik Bimetal and Sarthak Metals

Assuming the 90 days trading horizon Shivalik Bimetal Controls is expected to generate 0.79 times more return on investment than Sarthak Metals. However, Shivalik Bimetal Controls is 1.26 times less risky than Sarthak Metals. It trades about -0.01 of its potential returns per unit of risk. Sarthak Metals Limited is currently generating about -0.04 per unit of risk. If you would invest  58,607  in Shivalik Bimetal Controls on March 23, 2025 and sell it today you would lose (9,902) from holding Shivalik Bimetal Controls or give up 16.9% of portfolio value over 90 days.

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

Shivalik Bimetal Controls  vs.  Sarthak Metals Limited

Shivalik Bimetal Controls

Risk-Adjusted Performance

Weak

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

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 Shivalik Bimetal and Sarthak Metals

The main advantage of trading using opposite Shivalik Bimetal and Sarthak Metals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shivalik Bimetal 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 Shivalik Bimetal Controls 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.

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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.