Correlation Between Cholamandalam Financial and Silgo Retail
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By analyzing existing cross correlation between Cholamandalam Financial Holdings and Silgo Retail Limited, you can compare the effects of market volatilities on Cholamandalam Financial and Silgo Retail 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 Silgo Retail. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cholamandalam Financial and Silgo Retail.
Diversification Opportunities for Cholamandalam Financial and Silgo Retail
0.58 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Cholamandalam and Silgo is 0.58. Overlapping area represents the amount of risk that can be diversified away by holding Cholamandalam Financial Holdin and Silgo Retail Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Silgo Retail 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 Silgo Retail. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Silgo Retail Limited has no effect on the direction of Cholamandalam Financial i.e., Cholamandalam Financial and Silgo Retail go up and down completely randomly.
Pair Corralation between Cholamandalam Financial and Silgo Retail
Assuming the 90 days trading horizon Cholamandalam Financial Holdings is expected to under-perform the Silgo Retail. But the stock apears to be less risky and, when comparing its historical volatility, Cholamandalam Financial Holdings is 1.72 times less risky than Silgo Retail. The stock trades about -0.21 of its potential returns per unit of risk. The Silgo Retail Limited is currently generating about 0.0 of returns per unit of risk over similar time horizon. If you would invest 4,325 in Silgo Retail Limited on August 30, 2024 and sell it today you would lose (59.00) from holding Silgo Retail Limited or give up 1.36% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
Cholamandalam Financial Holdin vs. Silgo Retail Limited
Performance |
| Timeline |
| Cholamandalam Financial |
| Silgo Retail Limited |
Cholamandalam Financial and Silgo Retail Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cholamandalam Financial and Silgo Retail
The main advantage of trading using opposite Cholamandalam Financial and Silgo Retail positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cholamandalam Financial position performs unexpectedly, Silgo Retail 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 Silgo Retail will offset losses from the drop in Silgo Retail's long position.The idea behind Cholamandalam Financial Holdings and Silgo Retail 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 Center module to all portfolio management and optimization tools to improve performance of your portfolios.
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