Correlation Between Electrosteel Castings and Hi Tech
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By analyzing existing cross correlation between Electrosteel Castings Limited and The Hi Tech Gears, you can compare the effects of market volatilities on Electrosteel Castings and Hi Tech 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 Hi Tech. Check out your portfolio center. Please also check ongoing floating volatility patterns of Electrosteel Castings and Hi Tech.
Diversification Opportunities for Electrosteel Castings and Hi Tech
0.69 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Electrosteel and HITECHGEAR is 0.69. Overlapping area represents the amount of risk that can be diversified away by holding Electrosteel Castings Limited and The Hi Tech Gears in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hi Tech 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 Hi Tech. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hi Tech has no effect on the direction of Electrosteel Castings i.e., Electrosteel Castings and Hi Tech go up and down completely randomly.
Pair Corralation between Electrosteel Castings and Hi Tech
Assuming the 90 days trading horizon Electrosteel Castings is expected to generate 13.4 times less return on investment than Hi Tech. In addition to that, Electrosteel Castings is 1.3 times more volatile than The Hi Tech Gears. It trades about 0.01 of its total potential returns per unit of risk. The Hi Tech Gears is currently generating about 0.14 per unit of volatility. If you would invest 79,350 in The Hi Tech Gears on September 5, 2024 and sell it today you would earn a total of 5,880 from holding The Hi Tech Gears or generate 7.41% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Electrosteel Castings Limited vs. The Hi Tech Gears
Performance |
| Timeline |
| Electrosteel Castings |
| Hi Tech |
Electrosteel Castings and Hi Tech Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Electrosteel Castings and Hi Tech
The main advantage of trading using opposite Electrosteel Castings and Hi Tech positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Electrosteel Castings position performs unexpectedly, Hi Tech 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 Hi Tech will offset losses from the drop in Hi Tech'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 |
| Hi Tech vs. Hisar Metal Industries | Hi Tech vs. Osia Hyper Retail | Hi Tech vs. Cantabil Retail India | Hi Tech vs. Vibhor Steel Tubes |
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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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