Correlation Between Welspun Investments and Agarwal IndustrialLimite

Can any of the company-specific risk be diversified away by investing in both Welspun Investments and Agarwal IndustrialLimite 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 Agarwal IndustrialLimite 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 Agarwal Industrial, you can compare the effects of market volatilities on Welspun Investments and Agarwal IndustrialLimite 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 Agarwal IndustrialLimite. Check out your portfolio center. Please also check ongoing floating volatility patterns of Welspun Investments and Agarwal IndustrialLimite.

Diversification Opportunities for Welspun Investments and Agarwal IndustrialLimite

-0.48

Correlation Coefficient

Welspun Investments  Agarwal IndustrialLimite

Very good diversification

The 3 months correlation between Welspun and Agarwal is -0.48. Overlapping area represents the amount of risk that can be diversified away by holding Welspun Investments and and Agarwal Industrial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Agarwal IndustrialLimite 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 Agarwal IndustrialLimite. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Agarwal IndustrialLimite has no effect on the direction of Welspun Investments i.e., Welspun Investments and Agarwal IndustrialLimite go up and down completely randomly.

Pair Corralation between Welspun Investments and Agarwal IndustrialLimite

Assuming the 90 days trading horizon Welspun Investments and is expected to generate 1.57 times more return on investment than Agarwal IndustrialLimite. However, Welspun Investments is 1.57 times more volatile than Agarwal Industrial. It trades about 0.17 of its potential returns per unit of risk. Agarwal Industrial is currently generating about 0.01 per unit of risk. If you would invest  76,695  in Welspun Investments and on May 7, 2025 and sell it today you would earn a total of  29,305  from holding Welspun Investments and or generate 38.21% return on investment over 90 days.

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

Welspun Investments and  vs.  Agarwal Industrial

Welspun Investments and

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Welspun Investments and are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. Despite somewhat unsteady forward indicators, Welspun Investments sustained solid returns over the last few months and may actually be approaching a breakup point.

Agarwal IndustrialLimite

Risk-Adjusted Performance

Weakest

Over the last 90 days Agarwal Industrial has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound forward indicators, Agarwal IndustrialLimite is not utilizing all of its potentials. The newest stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with Welspun Investments and Agarwal IndustrialLimite

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

The idea behind Welspun Investments and and Agarwal Industrial 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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.