Correlation Between Elgi Rubber and SIL Investments
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By analyzing existing cross correlation between Elgi Rubber and SIL Investments Limited, you can compare the effects of market volatilities on Elgi Rubber and SIL Investments 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 Elgi Rubber with a short position of SIL Investments. Check out your portfolio center. Please also check ongoing floating volatility patterns of Elgi Rubber and SIL Investments.
Diversification Opportunities for Elgi Rubber and SIL Investments
0.78 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Elgi and SIL is 0.78. Overlapping area represents the amount of risk that can be diversified away by holding Elgi Rubber and SIL Investments Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SIL Investments and Elgi Rubber 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 Elgi Rubber are associated (or correlated) with SIL Investments. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SIL Investments has no effect on the direction of Elgi Rubber i.e., Elgi Rubber and SIL Investments go up and down completely randomly.
Pair Corralation between Elgi Rubber and SIL Investments
Assuming the 90 days trading horizon Elgi Rubber is expected to under-perform the SIL Investments. But the stock apears to be less risky and, when comparing its historical volatility, Elgi Rubber is 1.06 times less risky than SIL Investments. The stock trades about -0.74 of its potential returns per unit of risk. The SIL Investments Limited is currently generating about -0.18 of returns per unit of risk over similar time horizon. If you would invest 54,770 in SIL Investments Limited on November 28, 2024 and sell it today you would lose (6,285) from holding SIL Investments Limited or give up 11.48% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Elgi Rubber vs. SIL Investments Limited
Performance |
| Timeline |
| Elgi Rubber |
| SIL Investments |
Elgi Rubber and SIL Investments Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Elgi Rubber and SIL Investments
The main advantage of trading using opposite Elgi Rubber and SIL Investments positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Elgi Rubber position performs unexpectedly, SIL Investments 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 SIL Investments will offset losses from the drop in SIL Investments' long position.| Elgi Rubber vs. Infomedia Press Limited | Elgi Rubber vs. Bharatiya Global Infomedia | Elgi Rubber vs. Sarveshwar Foods Limited | Elgi Rubber vs. Entertainment Network Limited |
| SIL Investments vs. Dev Information Technology | SIL Investments vs. Nucleus Software Exports | SIL Investments vs. LT Technology Services | SIL Investments vs. Elin Electronics Limited |
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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
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