Correlation Between Crescent Star and Escorts Investment
Can any of the company-specific risk be diversified away by investing in both Crescent Star and Escorts Investment at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Crescent Star and Escorts Investment into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Crescent Star Insurance and Escorts Investment Bank, you can compare the effects of market volatilities on Crescent Star and Escorts Investment 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 Crescent Star with a short position of Escorts Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Crescent Star and Escorts Investment.
Diversification Opportunities for Crescent Star and Escorts Investment
0.59 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Crescent and Escorts is 0.59. Overlapping area represents the amount of risk that can be diversified away by holding Crescent Star Insurance and Escorts Investment Bank in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Escorts Investment Bank and Crescent Star 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 Crescent Star Insurance are associated (or correlated) with Escorts Investment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Escorts Investment Bank has no effect on the direction of Crescent Star i.e., Crescent Star and Escorts Investment go up and down completely randomly.
Pair Corralation between Crescent Star and Escorts Investment
Assuming the 90 days trading horizon Crescent Star Insurance is expected to generate 0.97 times more return on investment than Escorts Investment. However, Crescent Star Insurance is 1.03 times less risky than Escorts Investment. It trades about 0.05 of its potential returns per unit of risk. Escorts Investment Bank is currently generating about 0.01 per unit of risk. If you would invest 162.00 in Crescent Star Insurance on August 24, 2024 and sell it today you would earn a total of 130.00 from holding Crescent Star Insurance or generate 80.25% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 94.4% |
| Values | Daily Returns |
Crescent Star Insurance vs. Escorts Investment Bank
Performance |
| Timeline |
| Crescent Star Insurance |
| Escorts Investment Bank |
Crescent Star and Escorts Investment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Crescent Star and Escorts Investment
The main advantage of trading using opposite Crescent Star and Escorts Investment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Crescent Star position performs unexpectedly, Escorts Investment 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 Escorts Investment will offset losses from the drop in Escorts Investment's long position.| Crescent Star vs. Habib Bank | Crescent Star vs. National Bank of | Crescent Star vs. United Bank | Crescent Star vs. MCB Bank |
| Escorts Investment vs. Masood Textile Mills | Escorts Investment vs. Fauji Foods | Escorts Investment vs. KSB Pumps | Escorts Investment vs. Mari Petroleum |
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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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