Correlation Between Tinna Rubber and Mangalam Organics

Can any of the company-specific risk be diversified away by investing in both Tinna Rubber and Mangalam Organics 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 Tinna Rubber and Mangalam Organics into the same portfolio, which is an essential part of the fundamental portfolio management process.

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

Diversification Opportunities for Tinna Rubber and Mangalam Organics

-0.1

Correlation Coefficient

Tinna Rubber  Mangalam Organics

Good diversification

The 3 months correlation between Tinna and Mangalam is -0.1. Overlapping area represents the amount of risk that can be diversified away by holding Tinna Rubber and and Mangalam Organics Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mangalam Organics and Tinna Rubber 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 Tinna Rubber and are associated (or correlated) with Mangalam Organics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mangalam Organics has no effect on the direction of Tinna Rubber i.e., Tinna Rubber and Mangalam Organics go up and down completely randomly.

Pair Corralation between Tinna Rubber and Mangalam Organics

Assuming the 90 days trading horizon Tinna Rubber and is expected to under-perform the Mangalam Organics. But the stock apears to be less risky and, when comparing its historical volatility, Tinna Rubber and is 1.8 times less risky than Mangalam Organics. The stock trades about -0.04 of its potential returns per unit of risk. The Mangalam Organics Limited is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest  39,120  in Mangalam Organics Limited on April 25, 2025 and sell it today you would earn a total of  9,975  from holding Mangalam Organics Limited or generate 25.5% return on investment over 90 days.

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

Tinna Rubber and  vs.  Mangalam Organics Limited

Tinna Rubber

Risk-Adjusted Performance

Very Weak

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

Mangalam Organics

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Mangalam Organics Limited are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Despite somewhat uncertain basic indicators, Mangalam Organics sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Tinna Rubber and Mangalam Organics

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

The idea behind Tinna Rubber and and Mangalam Organics 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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.