Correlation Between Gujarat Alkalies and Styrenix Performance

Can any of the company-specific risk be diversified away by investing in both Gujarat Alkalies and Styrenix Performance 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 Gujarat Alkalies and Styrenix Performance into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Gujarat Alkalies and and Styrenix Performance Materials, you can compare the effects of market volatilities on Gujarat Alkalies and Styrenix Performance 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 Gujarat Alkalies with a short position of Styrenix Performance. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gujarat Alkalies and Styrenix Performance.

Diversification Opportunities for Gujarat Alkalies and Styrenix Performance

-0.51

Correlation Coefficient

Gujarat Alkalies  Styrenix Performance

Excellent diversification

The 3 months correlation between Gujarat and Styrenix is -0.51. Overlapping area represents the amount of risk that can be diversified away by holding Gujarat Alkalies and and Styrenix Performance Materials in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Styrenix Performance and Gujarat Alkalies 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 Gujarat Alkalies and are associated (or correlated) with Styrenix Performance. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Styrenix Performance has no effect on the direction of Gujarat Alkalies i.e., Gujarat Alkalies and Styrenix Performance go up and down completely randomly.

Pair Corralation between Gujarat Alkalies and Styrenix Performance

Assuming the 90 days trading horizon Gujarat Alkalies and is expected to under-perform the Styrenix Performance. But the stock apears to be less risky and, when comparing its historical volatility, Gujarat Alkalies and is 1.15 times less risky than Styrenix Performance. The stock trades about -0.07 of its potential returns per unit of risk. The Styrenix Performance Materials is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest  273,840  in Styrenix Performance Materials on May 7, 2025 and sell it today you would earn a total of  12,960  from holding Styrenix Performance Materials or generate 4.73% return on investment over 90 days.

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

Gujarat Alkalies and  vs.  Styrenix Performance Materials

Gujarat Alkalies

Risk-Adjusted Performance

Very Weak

Over the last 90 days Gujarat Alkalies and has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest uncertain performance, the Stock's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

Styrenix Performance

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Styrenix Performance Materials are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite fairly strong basic indicators, Styrenix Performance is not utilizing all of its potentials. The latest stock price confusion, may contribute to short-horizon losses for the traders.

Pair Trading with Gujarat Alkalies and Styrenix Performance

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

The idea behind Gujarat Alkalies and and Styrenix Performance Materials 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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.