Correlation Between Synergy Green and Deepak Fertilizers

Can any of the company-specific risk be diversified away by investing in both Synergy Green and Deepak Fertilizers 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 Synergy Green and Deepak Fertilizers into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Synergy Green Industries and Deepak Fertilizers and, you can compare the effects of market volatilities on Synergy Green and Deepak Fertilizers 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 Synergy Green with a short position of Deepak Fertilizers. Check out your portfolio center. Please also check ongoing floating volatility patterns of Synergy Green and Deepak Fertilizers.

Diversification Opportunities for Synergy Green and Deepak Fertilizers

0.7

Correlation Coefficient

Synergy Green  Deepak Fertilizers

Poor diversification

The 3 months correlation between Synergy and Deepak is 0.7. Overlapping area represents the amount of risk that can be diversified away by holding Synergy Green Industries and Deepak Fertilizers and in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Deepak Fertilizers and and Synergy Green 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 Synergy Green Industries are associated (or correlated) with Deepak Fertilizers. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Deepak Fertilizers and has no effect on the direction of Synergy Green i.e., Synergy Green and Deepak Fertilizers go up and down completely randomly.

Pair Corralation between Synergy Green and Deepak Fertilizers

Assuming the 90 days trading horizon Synergy Green Industries is expected to generate 1.18 times more return on investment than Deepak Fertilizers. However, Synergy Green is 1.18 times more volatile than Deepak Fertilizers and. It trades about 0.14 of its potential returns per unit of risk. Deepak Fertilizers and is currently generating about 0.15 per unit of risk. If you would invest  43,625  in Synergy Green Industries on April 20, 2025 and sell it today you would earn a total of  9,760  from holding Synergy Green Industries or generate 22.37% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	98.46%
Values	Daily Returns

Synergy Green Industries  vs.  Deepak Fertilizers and

Synergy Green Industries

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Synergy Green Industries are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively weak basic indicators, Synergy Green unveiled solid returns over the last few months and may actually be approaching a breakup point.

Deepak Fertilizers and

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Deepak Fertilizers and are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. Despite nearly inconsistent technical and fundamental indicators, Deepak Fertilizers reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Synergy Green and Deepak Fertilizers

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

The idea behind Synergy Green Industries and Deepak Fertilizers 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.

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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.