Correlation Between Electrosteel Castings and HEG
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By analyzing existing cross correlation between Electrosteel Castings Limited and HEG Limited, you can compare the effects of market volatilities on Electrosteel Castings and HEG 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 HEG. Check out your portfolio center. Please also check ongoing floating volatility patterns of Electrosteel Castings and HEG.
Diversification Opportunities for Electrosteel Castings and HEG
0.06 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Electrosteel and HEG is 0.06. Overlapping area represents the amount of risk that can be diversified away by holding Electrosteel Castings Limited and HEG Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on HEG Limited 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 HEG. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of HEG Limited has no effect on the direction of Electrosteel Castings i.e., Electrosteel Castings and HEG go up and down completely randomly.
Pair Corralation between Electrosteel Castings and HEG
Assuming the 90 days trading horizon Electrosteel Castings Limited is expected to under-perform the HEG. But the stock apears to be less risky and, when comparing its historical volatility, Electrosteel Castings Limited is 1.02 times less risky than HEG. The stock trades about -0.33 of its potential returns per unit of risk. The HEG Limited is currently generating about -0.29 of returns per unit of risk over similar time horizon. If you would invest 57,295 in HEG Limited on October 11, 2024 and sell it today you would lose (9,600) from holding HEG Limited or give up 16.76% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Electrosteel Castings Limited vs. HEG Limited
Performance |
| Timeline |
| Electrosteel Castings |
| HEG Limited |
Electrosteel Castings and HEG Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Electrosteel Castings and HEG
The main advantage of trading using opposite Electrosteel Castings and HEG positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Electrosteel Castings position performs unexpectedly, HEG 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 HEG will offset losses from the drop in HEG's long position.| Electrosteel Castings vs. Total Transport Systems | Electrosteel Castings vs. Gujarat Lease Financing | Electrosteel Castings vs. Sunflag Iron And | Electrosteel Castings vs. Kalyani Steels Limited |
| HEG vs. Bajaj Holdings Investment | HEG vs. Zydus Wellness Limited | HEG vs. Jindal Poly Investment | HEG vs. The Byke Hospitality |
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 Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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