Correlation Between Abbott India and Salzer Electronics
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By analyzing existing cross correlation between Abbott India Limited and Salzer Electronics Limited, you can compare the effects of market volatilities on Abbott India and Salzer Electronics 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 Abbott India with a short position of Salzer Electronics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Abbott India and Salzer Electronics.
Diversification Opportunities for Abbott India and Salzer Electronics
0.2 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Abbott and Salzer is 0.2. Overlapping area represents the amount of risk that can be diversified away by holding Abbott India Limited and Salzer Electronics Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Salzer Electronics and Abbott India 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 Abbott India Limited are associated (or correlated) with Salzer Electronics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Salzer Electronics has no effect on the direction of Abbott India i.e., Abbott India and Salzer Electronics go up and down completely randomly.
Pair Corralation between Abbott India and Salzer Electronics
Assuming the 90 days trading horizon Abbott India Limited is expected to under-perform the Salzer Electronics. But the stock apears to be less risky and, when comparing its historical volatility, Abbott India Limited is 2.0 times less risky than Salzer Electronics. The stock trades about -0.13 of its potential returns per unit of risk. The Salzer Electronics Limited is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest 106,485 in Salzer Electronics Limited on August 31, 2024 and sell it today you would earn a total of 5,165 from holding Salzer Electronics Limited or generate 4.85% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Abbott India Limited vs. Salzer Electronics Limited
Performance |
| Timeline |
| Abbott India Limited |
| Salzer Electronics |
Abbott India and Salzer Electronics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Abbott India and Salzer Electronics
The main advantage of trading using opposite Abbott India and Salzer Electronics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Abbott India position performs unexpectedly, Salzer Electronics 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 Salzer Electronics will offset losses from the drop in Salzer Electronics' long position.| Abbott India vs. Juniper Hotels | Abbott India vs. Chalet Hotels Limited | Abbott India vs. The Hi Tech Gears | Abbott India vs. Sintex Plastics Technology |
| Salzer Electronics vs. Kingfa Science Technology | Salzer Electronics vs. GTL Limited | Salzer Electronics vs. Indo Amines Limited | Salzer Electronics vs. HDFC Mutual Fund |
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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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