Correlation Between Centum Electronics and Electronics Mart
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By analyzing existing cross correlation between Centum Electronics Limited and Electronics Mart India, you can compare the effects of market volatilities on Centum Electronics and Electronics Mart 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 Centum Electronics with a short position of Electronics Mart. Check out your portfolio center. Please also check ongoing floating volatility patterns of Centum Electronics and Electronics Mart.
Diversification Opportunities for Centum Electronics and Electronics Mart
0.64 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Centum and Electronics is 0.64. Overlapping area represents the amount of risk that can be diversified away by holding Centum Electronics Limited and Electronics Mart India in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Electronics Mart India and Centum Electronics 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 Centum Electronics Limited are associated (or correlated) with Electronics Mart. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Electronics Mart India has no effect on the direction of Centum Electronics i.e., Centum Electronics and Electronics Mart go up and down completely randomly.
Pair Corralation between Centum Electronics and Electronics Mart
Assuming the 90 days trading horizon Centum Electronics Limited is expected to generate 1.16 times more return on investment than Electronics Mart. However, Centum Electronics is 1.16 times more volatile than Electronics Mart India. It trades about 0.03 of its potential returns per unit of risk. Electronics Mart India is currently generating about 0.02 per unit of risk. If you would invest 139,212 in Centum Electronics Limited on September 1, 2024 and sell it today you would earn a total of 17,758 from holding Centum Electronics Limited or generate 12.76% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 99.25% |
| Values | Daily Returns |
Centum Electronics Limited vs. Electronics Mart India
Performance |
| Timeline |
| Centum Electronics |
| Electronics Mart India |
Centum Electronics and Electronics Mart Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Centum Electronics and Electronics Mart
The main advantage of trading using opposite Centum Electronics and Electronics Mart positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Centum Electronics position performs unexpectedly, Electronics Mart 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 Electronics Mart will offset losses from the drop in Electronics Mart's long position.| Centum Electronics vs. The Orissa Minerals | Centum Electronics vs. Malu Paper Mills | Centum Electronics vs. Kingfa Science Technology | Centum Electronics vs. Rico Auto Industries |
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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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
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