Correlation Between Agarwal IndustrialLimite and TPL Plastech
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By analyzing existing cross correlation between Agarwal Industrial and TPL Plastech Limited, you can compare the effects of market volatilities on Agarwal IndustrialLimite and TPL Plastech 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 Agarwal IndustrialLimite with a short position of TPL Plastech. Check out your portfolio center. Please also check ongoing floating volatility patterns of Agarwal IndustrialLimite and TPL Plastech.
Diversification Opportunities for Agarwal IndustrialLimite and TPL Plastech
0.87 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Agarwal and TPL is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding Agarwal Industrial and TPL Plastech Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TPL Plastech Limited and Agarwal IndustrialLimite 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 Agarwal Industrial are associated (or correlated) with TPL Plastech. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TPL Plastech Limited has no effect on the direction of Agarwal IndustrialLimite i.e., Agarwal IndustrialLimite and TPL Plastech go up and down completely randomly.
Pair Corralation between Agarwal IndustrialLimite and TPL Plastech
Assuming the 90 days trading horizon Agarwal Industrial is expected to under-perform the TPL Plastech. But the stock apears to be less risky and, when comparing its historical volatility, Agarwal Industrial is 1.17 times less risky than TPL Plastech. The stock trades about -0.4 of its potential returns per unit of risk. The TPL Plastech Limited is currently generating about -0.28 of returns per unit of risk over similar time horizon. If you would invest 8,684 in TPL Plastech Limited on December 4, 2024 and sell it today you would lose (1,332) from holding TPL Plastech Limited or give up 15.34% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Agarwal Industrial vs. TPL Plastech Limited
Performance |
| Timeline |
| Agarwal IndustrialLimite |
| TPL Plastech Limited |
Agarwal IndustrialLimite and TPL Plastech Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Agarwal IndustrialLimite and TPL Plastech
The main advantage of trading using opposite Agarwal IndustrialLimite and TPL Plastech positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Agarwal IndustrialLimite position performs unexpectedly, TPL Plastech 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 TPL Plastech will offset losses from the drop in TPL Plastech's long position.The idea behind Agarwal Industrial and TPL Plastech Limited 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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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 File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
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