Correlation Between Can Fin and Welspun Investments
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By analyzing existing cross correlation between Can Fin Homes and Welspun Investments and, you can compare the effects of market volatilities on Can Fin and Welspun Investments 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 Can Fin with a short position of Welspun Investments. Check out your portfolio center. Please also check ongoing floating volatility patterns of Can Fin and Welspun Investments.
Diversification Opportunities for Can Fin and Welspun Investments
0.66 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Can and Welspun is 0.66. Overlapping area represents the amount of risk that can be diversified away by holding Can Fin Homes and Welspun Investments and in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Welspun Investments and and Can Fin 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 Can Fin Homes are associated (or correlated) with Welspun Investments. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Welspun Investments and has no effect on the direction of Can Fin i.e., Can Fin and Welspun Investments go up and down completely randomly.
Pair Corralation between Can Fin and Welspun Investments
Assuming the 90 days trading horizon Can Fin Homes is expected to under-perform the Welspun Investments. But the stock apears to be less risky and, when comparing its historical volatility, Can Fin Homes is 2.84 times less risky than Welspun Investments. The stock trades about -0.27 of its potential returns per unit of risk. The Welspun Investments and is currently generating about -0.07 of returns per unit of risk over similar time horizon. If you would invest 95,995 in Welspun Investments and on September 2, 2024 and sell it today you would lose (5,180) from holding Welspun Investments and or give up 5.4% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.24% |
| Values | Daily Returns |
Can Fin Homes vs. Welspun Investments and
Performance |
| Timeline |
| Can Fin Homes |
| Welspun Investments and |
Can Fin and Welspun Investments Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Can Fin and Welspun Investments
The main advantage of trading using opposite Can Fin and Welspun Investments positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Can Fin position performs unexpectedly, Welspun Investments 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 Welspun Investments will offset losses from the drop in Welspun Investments' long position.| Can Fin vs. Reliance Industries Limited | Can Fin vs. Oil Natural Gas | Can Fin vs. ICICI Bank Limited | Can Fin vs. Bharti Airtel Limited |
| Welspun Investments vs. Sunflag Iron And | Welspun Investments vs. Rama Steel Tubes | Welspun Investments vs. EIH Associated Hotels | Welspun Investments vs. JSW Steel Limited |
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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
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