Correlation Between Electrosteel Castings and Can Fin
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By analyzing existing cross correlation between Electrosteel Castings Limited and Can Fin Homes, you can compare the effects of market volatilities on Electrosteel Castings and Can Fin 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 Electrosteel Castings with a short position of Can Fin. Check out your portfolio center. Please also check ongoing floating volatility patterns of Electrosteel Castings and Can Fin.
Diversification Opportunities for Electrosteel Castings and Can Fin
0.72 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Electrosteel and Can is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding Electrosteel Castings Limited and Can Fin Homes in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Can Fin Homes and Electrosteel Castings 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 Electrosteel Castings Limited are associated (or correlated) with Can Fin. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Can Fin Homes has no effect on the direction of Electrosteel Castings i.e., Electrosteel Castings and Can Fin go up and down completely randomly.
Pair Corralation between Electrosteel Castings and Can Fin
Assuming the 90 days trading horizon Electrosteel Castings Limited is expected to under-perform the Can Fin. In addition to that, Electrosteel Castings is 2.75 times more volatile than Can Fin Homes. It trades about -0.1 of its total potential returns per unit of risk. Can Fin Homes is currently generating about -0.23 per unit of volatility. If you would invest 86,900 in Can Fin Homes on September 1, 2024 and sell it today you would lose (4,505) from holding Can Fin Homes or give up 5.18% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.24% |
| Values | Daily Returns |
Electrosteel Castings Limited vs. Can Fin Homes
Performance |
| Timeline |
| Electrosteel Castings |
| Can Fin Homes |
Electrosteel Castings and Can Fin Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Electrosteel Castings and Can Fin
The main advantage of trading using opposite Electrosteel Castings and Can Fin positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Electrosteel Castings position performs unexpectedly, Can Fin 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 Can Fin will offset losses from the drop in Can Fin's long position.| Electrosteel Castings vs. Tata Investment | Electrosteel Castings vs. Jindal Poly Investment | Electrosteel Castings vs. KNR Constructions Limited | Electrosteel Castings vs. BF Investment Limited |
| Can Fin vs. Lemon Tree Hotels | Can Fin vs. Manaksia Coated Metals | Can Fin vs. EIH Associated Hotels | Can Fin vs. Action Construction Equipment |
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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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