Correlation Between Coffee Day and Electronics Mart
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By analyzing existing cross correlation between Coffee Day Enterprises and Electronics Mart India, you can compare the effects of market volatilities on Coffee Day 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 Coffee Day with a short position of Electronics Mart. Check out your portfolio center. Please also check ongoing floating volatility patterns of Coffee Day and Electronics Mart.
Diversification Opportunities for Coffee Day and Electronics Mart
0.49 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Coffee and Electronics is 0.49. Overlapping area represents the amount of risk that can be diversified away by holding Coffee Day Enterprises 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 Coffee Day 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 Coffee Day Enterprises 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 Coffee Day i.e., Coffee Day and Electronics Mart go up and down completely randomly.
Pair Corralation between Coffee Day and Electronics Mart
Assuming the 90 days trading horizon Coffee Day Enterprises is expected to under-perform the Electronics Mart. In addition to that, Coffee Day is 1.18 times more volatile than Electronics Mart India. It trades about -0.12 of its total potential returns per unit of risk. Electronics Mart India is currently generating about -0.05 per unit of volatility. If you would invest 20,730 in Electronics Mart India on October 25, 2024 and sell it today you would lose (5,030) from holding Electronics Mart India or give up 24.26% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Coffee Day Enterprises vs. Electronics Mart India
Performance |
| Timeline |
| Coffee Day Enterprises |
| Electronics Mart India |
Coffee Day and Electronics Mart Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Coffee Day and Electronics Mart
The main advantage of trading using opposite Coffee Day and Electronics Mart positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Coffee Day 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.| Coffee Day vs. Shemaroo Entertainment Limited | Coffee Day vs. Zee Entertainment Enterprises | Coffee Day vs. Next Mediaworks Limited | Coffee Day vs. Silly Monks Entertainment |
| Electronics Mart vs. Compucom Software Limited | Electronics Mart vs. Coffee Day Enterprises | Electronics Mart vs. The Federal Bank | Electronics Mart vs. Kotak Mahindra Bank |
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 Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
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