Correlation Between CSL and Srj Technologies
Can any of the company-specific risk be diversified away by investing in both CSL and Srj Technologies 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 CSL and Srj Technologies into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CSL and Srj Technologies Group, you can compare the effects of market volatilities on CSL and Srj Technologies 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 CSL with a short position of Srj Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of CSL and Srj Technologies.
Diversification Opportunities for CSL and Srj Technologies
0.73 | Correlation Coefficient |
Poor diversification
The 3 months correlation between CSL and Srj is 0.73. Overlapping area represents the amount of risk that can be diversified away by holding CSL and Srj Technologies Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Srj Technologies and CSL 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 CSL are associated (or correlated) with Srj Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Srj Technologies has no effect on the direction of CSL i.e., CSL and Srj Technologies go up and down completely randomly.
Pair Corralation between CSL and Srj Technologies
Assuming the 90 days trading horizon CSL is expected to under-perform the Srj Technologies. But the stock apears to be less risky and, when comparing its historical volatility, CSL is 5.14 times less risky than Srj Technologies. The stock trades about -0.25 of its potential returns per unit of risk. The Srj Technologies Group is currently generating about 0.0 of returns per unit of risk over similar time horizon. If you would invest 4.10 in Srj Technologies Group on August 25, 2024 and sell it today you would lose (0.10) from holding Srj Technologies Group or give up 2.44% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.65% |
| Values | Daily Returns |
CSL vs. Srj Technologies Group
Performance |
| Timeline |
| CSL |
| Srj Technologies |
CSL and Srj Technologies Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CSL and Srj Technologies
The main advantage of trading using opposite CSL and Srj Technologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CSL position performs unexpectedly, Srj Technologies 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 Srj Technologies will offset losses from the drop in Srj Technologies' long position.| CSL vs. REGAL ASIAN INVESTMENTS | CSL vs. Hotel Property Investments | CSL vs. Eagle Mountain Mining | CSL vs. Australian United 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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
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