Correlation Between Sarthak Metals and Indo Borax

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

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

Diversification Opportunities for Sarthak Metals and Indo Borax

0.35

Correlation Coefficient

Sarthak Metals  Indo Borax

Weak diversification

The 3 months correlation between Sarthak and Indo is 0.35. Overlapping area represents the amount of risk that can be diversified away by holding Sarthak Metals Limited and Indo Borax Chemicals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Indo Borax Chemicals and Sarthak Metals 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 Sarthak Metals Limited are associated (or correlated) with Indo Borax. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Indo Borax Chemicals has no effect on the direction of Sarthak Metals i.e., Sarthak Metals and Indo Borax go up and down completely randomly.

Pair Corralation between Sarthak Metals and Indo Borax

Assuming the 90 days trading horizon Sarthak Metals Limited is expected to under-perform the Indo Borax. In addition to that, Sarthak Metals is 1.1 times more volatile than Indo Borax Chemicals. It trades about -0.01 of its total potential returns per unit of risk. Indo Borax Chemicals is currently generating about 0.21 per unit of volatility. If you would invest  18,460  in Indo Borax Chemicals on April 24, 2025 and sell it today you would earn a total of  5,365  from holding Indo Borax Chemicals or generate 29.06% return on investment over 90 days.

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

Sarthak Metals Limited  vs.  Indo Borax Chemicals

Sarthak Metals

Risk-Adjusted Performance

Very Weak

Over the last 90 days Sarthak Metals Limited has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, Sarthak Metals is not utilizing all of its potentials. The current stock price uproar, may contribute to short-horizon losses for the private investors.

Indo Borax Chemicals

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Indo Borax Chemicals are ranked lower than 16 (%) of all global equities and portfolios over the last 90 days. Even with relatively weak basic indicators, Indo Borax reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Sarthak Metals and Indo Borax

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

The idea behind Sarthak Metals Limited and Indo Borax Chemicals 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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..