Correlation Between Shyam Telecom and POWERGRID Infrastructure

Can any of the company-specific risk be diversified away by investing in both Shyam Telecom and POWERGRID Infrastructure 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 Shyam Telecom and POWERGRID Infrastructure into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Shyam Telecom Limited and POWERGRID Infrastructure Investment, you can compare the effects of market volatilities on Shyam Telecom and POWERGRID Infrastructure 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 Shyam Telecom with a short position of POWERGRID Infrastructure. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shyam Telecom and POWERGRID Infrastructure.

Diversification Opportunities for Shyam Telecom and POWERGRID Infrastructure

0.64

Correlation Coefficient

Shyam Telecom  POWERGRID Infrastructure

Poor diversification

The 3 months correlation between Shyam and POWERGRID is 0.64. Overlapping area represents the amount of risk that can be diversified away by holding Shyam Telecom Limited and POWERGRID Infrastructure Inves in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on POWERGRID Infrastructure and Shyam Telecom 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 Shyam Telecom Limited are associated (or correlated) with POWERGRID Infrastructure. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of POWERGRID Infrastructure has no effect on the direction of Shyam Telecom i.e., Shyam Telecom and POWERGRID Infrastructure go up and down completely randomly.

Pair Corralation between Shyam Telecom and POWERGRID Infrastructure

Assuming the 90 days trading horizon Shyam Telecom Limited is expected to generate 3.57 times more return on investment than POWERGRID Infrastructure. However, Shyam Telecom is 3.57 times more volatile than POWERGRID Infrastructure Investment. It trades about 0.06 of its potential returns per unit of risk. POWERGRID Infrastructure Investment is currently generating about 0.19 per unit of risk. If you would invest  1,302  in Shyam Telecom Limited on May 6, 2025 and sell it today you would earn a total of  139.00  from holding Shyam Telecom Limited or generate 10.68% return on investment over 90 days.

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

Shyam Telecom Limited  vs.  POWERGRID Infrastructure Inves

Shyam Telecom Limited

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Shyam Telecom Limited are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of rather uncertain basic indicators, Shyam Telecom exhibited solid returns over the last few months and may actually be approaching a breakup point.

POWERGRID Infrastructure

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in POWERGRID Infrastructure Investment are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively unsteady basic indicators, POWERGRID Infrastructure may actually be approaching a critical reversion point that can send shares even higher in September 2025.

Pair Trading with Shyam Telecom and POWERGRID Infrastructure

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

The idea behind Shyam Telecom Limited and POWERGRID Infrastructure Investment 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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.