Correlation Between Central Bank and Centum Electronics
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By analyzing existing cross correlation between Central Bank of and Centum Electronics Limited, you can compare the effects of market volatilities on Central Bank and Centum 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 Central Bank with a short position of Centum Electronics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Central Bank and Centum Electronics.
Diversification Opportunities for Central Bank and Centum Electronics
0.46 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Central and Centum is 0.46. Overlapping area represents the amount of risk that can be diversified away by holding Central Bank of and Centum Electronics Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Centum Electronics and Central Bank 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 Central Bank of are associated (or correlated) with Centum Electronics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Centum Electronics has no effect on the direction of Central Bank i.e., Central Bank and Centum Electronics go up and down completely randomly.
Pair Corralation between Central Bank and Centum Electronics
Assuming the 90 days trading horizon Central Bank of is expected to generate 1.2 times more return on investment than Centum Electronics. However, Central Bank is 1.2 times more volatile than Centum Electronics Limited. It trades about 0.13 of its potential returns per unit of risk. Centum Electronics Limited is currently generating about 0.02 per unit of risk. If you would invest 5,490 in Central Bank of on September 13, 2024 and sell it today you would earn a total of 409.00 from holding Central Bank of or generate 7.45% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Central Bank of vs. Centum Electronics Limited
Performance |
| Timeline |
| Central Bank |
| Centum Electronics |
Central Bank and Centum Electronics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Central Bank and Centum Electronics
The main advantage of trading using opposite Central Bank and Centum Electronics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Central Bank position performs unexpectedly, Centum 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 Centum Electronics will offset losses from the drop in Centum Electronics' long position.| Central Bank vs. Reliance Industries Limited | Central Bank vs. State Bank of | Central Bank vs. Oil Natural Gas | Central Bank vs. ICICI Bank Limited |
| Centum Electronics vs. Vodafone Idea Limited | Centum Electronics vs. Yes Bank Limited | Centum Electronics vs. Indian Overseas Bank | Centum Electronics vs. Indian Oil |
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 Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
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