Correlation Between Mangalore Chemicals and Gujarat Lease

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

By analyzing existing cross correlation between Mangalore Chemicals Fertilizers and Gujarat Lease Financing, you can compare the effects of market volatilities on Mangalore Chemicals and Gujarat Lease 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 Mangalore Chemicals with a short position of Gujarat Lease. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mangalore Chemicals and Gujarat Lease.

Diversification Opportunities for Mangalore Chemicals and Gujarat Lease

0.46

Correlation Coefficient

Mangalore Chemicals  Gujarat Lease

Very weak diversification

The 3 months correlation between Mangalore and Gujarat is 0.46. Overlapping area represents the amount of risk that can be diversified away by holding Mangalore Chemicals Fertilizer and Gujarat Lease Financing in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gujarat Lease Financing and Mangalore Chemicals 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 Mangalore Chemicals Fertilizers are associated (or correlated) with Gujarat Lease. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gujarat Lease Financing has no effect on the direction of Mangalore Chemicals i.e., Mangalore Chemicals and Gujarat Lease go up and down completely randomly.

Pair Corralation between Mangalore Chemicals and Gujarat Lease

Assuming the 90 days trading horizon Mangalore Chemicals Fertilizers is expected to generate 0.87 times more return on investment than Gujarat Lease. However, Mangalore Chemicals Fertilizers is 1.15 times less risky than Gujarat Lease. It trades about 0.31 of its potential returns per unit of risk. Gujarat Lease Financing is currently generating about 0.07 per unit of risk. If you would invest  22,499  in Mangalore Chemicals Fertilizers on May 7, 2025 and sell it today you would earn a total of  13,276  from holding Mangalore Chemicals Fertilizers or generate 59.01% return on investment over 90 days.

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

Mangalore Chemicals Fertilizer  vs.  Gujarat Lease Financing

Mangalore Chemicals

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Mangalore Chemicals Fertilizers are ranked lower than 24 (%) of all global equities and portfolios over the last 90 days. In spite of rather weak technical and fundamental indicators, Mangalore Chemicals exhibited solid returns over the last few months and may actually be approaching a breakup point.

Gujarat Lease Financing

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Gujarat Lease Financing are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, Gujarat Lease may actually be approaching a critical reversion point that can send shares even higher in September 2025.

Pair Trading with Mangalore Chemicals and Gujarat Lease

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

The idea behind Mangalore Chemicals Fertilizers and Gujarat Lease Financing 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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.