Correlation Between Cholamandalam Financial and Global Health
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By analyzing existing cross correlation between Cholamandalam Financial Holdings and Global Health Limited, you can compare the effects of market volatilities on Cholamandalam Financial and Global Health 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 Cholamandalam Financial with a short position of Global Health. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cholamandalam Financial and Global Health.
Diversification Opportunities for Cholamandalam Financial and Global Health
-0.45 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Cholamandalam and Global is -0.45. Overlapping area represents the amount of risk that can be diversified away by holding Cholamandalam Financial Holdin and Global Health Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Global Health Limited and Cholamandalam Financial 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 Cholamandalam Financial Holdings are associated (or correlated) with Global Health. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Global Health Limited has no effect on the direction of Cholamandalam Financial i.e., Cholamandalam Financial and Global Health go up and down completely randomly.
Pair Corralation between Cholamandalam Financial and Global Health
Assuming the 90 days trading horizon Cholamandalam Financial Holdings is expected to under-perform the Global Health. In addition to that, Cholamandalam Financial is 1.13 times more volatile than Global Health Limited. It trades about -0.31 of its total potential returns per unit of risk. Global Health Limited is currently generating about 0.07 per unit of volatility. If you would invest 102,255 in Global Health Limited on August 30, 2024 and sell it today you would earn a total of 5,400 from holding Global Health Limited or generate 5.28% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 97.62% |
| Values | Daily Returns |
Cholamandalam Financial Holdin vs. Global Health Limited
Performance |
| Timeline |
| Cholamandalam Financial |
| Global Health Limited |
Cholamandalam Financial and Global Health Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cholamandalam Financial and Global Health
The main advantage of trading using opposite Cholamandalam Financial and Global Health positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cholamandalam Financial position performs unexpectedly, Global Health 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 Global Health will offset losses from the drop in Global Health's long position.The idea behind Cholamandalam Financial Holdings and Global Health 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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
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