Correlation Between Electrosteel Castings and HFCL
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By analyzing existing cross correlation between Electrosteel Castings Limited and HFCL Limited, you can compare the effects of market volatilities on Electrosteel Castings and HFCL 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 HFCL. Check out your portfolio center. Please also check ongoing floating volatility patterns of Electrosteel Castings and HFCL.
Diversification Opportunities for Electrosteel Castings and HFCL
0.84 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Electrosteel and HFCL is 0.84. Overlapping area represents the amount of risk that can be diversified away by holding Electrosteel Castings Limited and HFCL Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on HFCL 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 HFCL. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of HFCL Limited has no effect on the direction of Electrosteel Castings i.e., Electrosteel Castings and HFCL go up and down completely randomly.
Pair Corralation between Electrosteel Castings and HFCL
Assuming the 90 days trading horizon Electrosteel Castings Limited is expected to generate 1.01 times more return on investment than HFCL. However, Electrosteel Castings is 1.01 times more volatile than HFCL Limited. It trades about 0.11 of its potential returns per unit of risk. HFCL Limited is currently generating about 0.05 per unit of risk. If you would invest 3,787 in Electrosteel Castings Limited on September 5, 2024 and sell it today you would earn a total of 12,532 from holding Electrosteel Castings Limited or generate 330.92% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 99.39% |
| Values | Daily Returns |
Electrosteel Castings Limited vs. HFCL Limited
Performance |
| Timeline |
| Electrosteel Castings |
| HFCL Limited |
Electrosteel Castings and HFCL Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Electrosteel Castings and HFCL
The main advantage of trading using opposite Electrosteel Castings and HFCL positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Electrosteel Castings position performs unexpectedly, HFCL 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 HFCL will offset losses from the drop in HFCL's long position.| Electrosteel Castings vs. Steel Authority of | Electrosteel Castings vs. Iris Clothings Limited | Electrosteel Castings vs. SAL Steel Limited | Electrosteel Castings vs. Rama Steel Tubes |
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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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
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