Correlation Between Electrosteel Castings and Prakash Steelage
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By analyzing existing cross correlation between Electrosteel Castings Limited and Prakash Steelage Limited, you can compare the effects of market volatilities on Electrosteel Castings and Prakash Steelage 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 Prakash Steelage. Check out your portfolio center. Please also check ongoing floating volatility patterns of Electrosteel Castings and Prakash Steelage.
Diversification Opportunities for Electrosteel Castings and Prakash Steelage
0.82 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Electrosteel and Prakash is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding Electrosteel Castings Limited and Prakash Steelage Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Prakash Steelage 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 Prakash Steelage. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Prakash Steelage has no effect on the direction of Electrosteel Castings i.e., Electrosteel Castings and Prakash Steelage go up and down completely randomly.
Pair Corralation between Electrosteel Castings and Prakash Steelage
Assuming the 90 days trading horizon Electrosteel Castings Limited is expected to under-perform the Prakash Steelage. In addition to that, Electrosteel Castings is 1.28 times more volatile than Prakash Steelage Limited. It trades about -0.1 of its total potential returns per unit of risk. Prakash Steelage Limited is currently generating about -0.04 per unit of volatility. If you would invest 864.00 in Prakash Steelage Limited on September 3, 2024 and sell it today you would lose (24.00) from holding Prakash Steelage Limited or give up 2.78% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Electrosteel Castings Limited vs. Prakash Steelage Limited
Performance |
| Timeline |
| Electrosteel Castings |
| Prakash Steelage |
Electrosteel Castings and Prakash Steelage Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Electrosteel Castings and Prakash Steelage
The main advantage of trading using opposite Electrosteel Castings and Prakash Steelage positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Electrosteel Castings position performs unexpectedly, Prakash Steelage 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 Prakash Steelage will offset losses from the drop in Prakash Steelage's long position.| Electrosteel Castings vs. NMDC Limited | Electrosteel Castings vs. Steel Authority of | Electrosteel Castings vs. Indian Metals Ferro | Electrosteel Castings vs. JTL Industries |
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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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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