Correlation Between Welspun Investments and Mangal Credit

Can any of the company-specific risk be diversified away by investing in both Welspun Investments and Mangal Credit 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 Welspun Investments and Mangal Credit into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Welspun Investments and and Mangal Credit and, you can compare the effects of market volatilities on Welspun Investments and Mangal Credit 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 Welspun Investments with a short position of Mangal Credit. Check out your portfolio center. Please also check ongoing floating volatility patterns of Welspun Investments and Mangal Credit.

Diversification Opportunities for Welspun Investments and Mangal Credit

0.81

Correlation Coefficient

Welspun Investments  Mangal Credit

Very poor diversification

The 3 months correlation between Welspun and Mangal is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding Welspun Investments and and Mangal Credit and in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mangal Credit and Welspun Investments 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 Welspun Investments and are associated (or correlated) with Mangal Credit. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mangal Credit has no effect on the direction of Welspun Investments i.e., Welspun Investments and Mangal Credit go up and down completely randomly.

Pair Corralation between Welspun Investments and Mangal Credit

Assuming the 90 days trading horizon Welspun Investments and is expected to generate 1.4 times more return on investment than Mangal Credit. However, Welspun Investments is 1.4 times more volatile than Mangal Credit and. It trades about 0.12 of its potential returns per unit of risk. Mangal Credit and is currently generating about 0.15 per unit of risk. If you would invest  84,750  in Welspun Investments and on April 25, 2025 and sell it today you would earn a total of  21,750  from holding Welspun Investments and or generate 25.66% return on investment over 90 days.

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

Welspun Investments and  vs.  Mangal Credit and

Welspun Investments and

Risk-Adjusted Performance

OK

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

Mangal Credit

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Mangal Credit and are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. In spite of rather weak fundamental indicators, Mangal Credit exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Welspun Investments and Mangal Credit

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

The idea behind Welspun Investments and and Mangal Credit 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.

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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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.