Correlation Between Cambridge Technology and IG Petrochemicals
Can any of the company-specific risk be diversified away by investing in both Cambridge Technology and IG Petrochemicals 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 Cambridge Technology and IG Petrochemicals into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Cambridge Technology Enterprises and IG Petrochemicals Limited, you can compare the effects of market volatilities on Cambridge Technology and IG Petrochemicals 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 Cambridge Technology with a short position of IG Petrochemicals. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cambridge Technology and IG Petrochemicals.
Diversification Opportunities for Cambridge Technology and IG Petrochemicals
0.29 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Cambridge and IGPL is 0.29. Overlapping area represents the amount of risk that can be diversified away by holding Cambridge Technology Enterpris and IG Petrochemicals Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on IG Petrochemicals and Cambridge Technology 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 Cambridge Technology Enterprises are associated (or correlated) with IG Petrochemicals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of IG Petrochemicals has no effect on the direction of Cambridge Technology i.e., Cambridge Technology and IG Petrochemicals go up and down completely randomly.
Pair Corralation between Cambridge Technology and IG Petrochemicals
Assuming the 90 days trading horizon Cambridge Technology Enterprises is expected to generate 1.61 times more return on investment than IG Petrochemicals. However, Cambridge Technology is 1.61 times more volatile than IG Petrochemicals Limited. It trades about 0.0 of its potential returns per unit of risk. IG Petrochemicals Limited is currently generating about -0.23 per unit of risk. If you would invest 10,864 in Cambridge Technology Enterprises on October 11, 2024 and sell it today you would lose (148.00) from holding Cambridge Technology Enterprises or give up 1.36% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 95.24% |
| Values | Daily Returns |
Cambridge Technology Enterpris vs. IG Petrochemicals Limited
Performance |
| Timeline |
| Cambridge Technology |
| IG Petrochemicals |
Cambridge Technology and IG Petrochemicals Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cambridge Technology and IG Petrochemicals
The main advantage of trading using opposite Cambridge Technology and IG Petrochemicals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cambridge Technology position performs unexpectedly, IG Petrochemicals 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 IG Petrochemicals will offset losses from the drop in IG Petrochemicals' long position.| Cambridge Technology vs. Sarveshwar Foods Limited | Cambridge Technology vs. Le Travenues Technology | Cambridge Technology vs. ADF Foods Limited | Cambridge Technology vs. Kohinoor Foods Limited |
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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
Other Complementary Tools
| Piotroski F Score Get Piotroski F Score based on the binary analysis strategy of nine different fundamentals | |
| Positions Ratings Determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Share Portfolio Track or share privately all of your investments from the convenience of any device | |
| Portfolio Rebalancing Analyze risk-adjusted returns against different time horizons to find asset-allocation targets | |
| Odds Of Bankruptcy Get analysis of equity chance of financial distress in the next 2 years |