Correlation Between Elin Electronics and Electronics Mart
Can any of the company-specific risk be diversified away by investing in both Elin Electronics and Electronics Mart at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Elin Electronics and Electronics Mart into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Elin Electronics Limited and Electronics Mart India, you can compare the effects of market volatilities on Elin Electronics and Electronics Mart 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 Elin Electronics with a short position of Electronics Mart. Check out your portfolio center. Please also check ongoing floating volatility patterns of Elin Electronics and Electronics Mart.
Diversification Opportunities for Elin Electronics and Electronics Mart
0.76 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Elin and Electronics is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding Elin Electronics Limited and Electronics Mart India in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Electronics Mart India and Elin Electronics 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 Elin Electronics Limited are associated (or correlated) with Electronics Mart. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Electronics Mart India has no effect on the direction of Elin Electronics i.e., Elin Electronics and Electronics Mart go up and down completely randomly.
Pair Corralation between Elin Electronics and Electronics Mart
Assuming the 90 days trading horizon Elin Electronics Limited is expected to generate 0.64 times more return on investment than Electronics Mart. However, Elin Electronics Limited is 1.55 times less risky than Electronics Mart. It trades about 0.03 of its potential returns per unit of risk. Electronics Mart India is currently generating about -0.06 per unit of risk. If you would invest 21,622 in Elin Electronics Limited on September 1, 2024 and sell it today you would earn a total of 229.00 from holding Elin Electronics Limited or generate 1.06% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Elin Electronics Limited vs. Electronics Mart India
Performance |
| Timeline |
| Elin Electronics |
| Electronics Mart India |
Elin Electronics and Electronics Mart Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Elin Electronics and Electronics Mart
The main advantage of trading using opposite Elin Electronics and Electronics Mart positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Elin Electronics position performs unexpectedly, Electronics Mart 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 Electronics Mart will offset losses from the drop in Electronics Mart's long position.| Elin Electronics vs. Reliance Industries Limited | Elin Electronics vs. HDFC Bank Limited | Elin Electronics vs. Kingfa Science Technology | Elin Electronics vs. Rico Auto Industries |
| Electronics Mart vs. Osia Hyper Retail | Electronics Mart vs. Shree Pushkar Chemicals | Electronics Mart vs. UFO Moviez India | Electronics Mart vs. Mangalore Chemicals Fertilizers |
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 Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
Other Complementary Tools
| Price Ceiling Movement Calculate and plot Price Ceiling Movement for different equity instruments | |
| Theme Ratings Determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Competition Analyzer Analyze and compare many basic indicators for a group of related or unrelated entities | |
| Pattern Recognition Use different Pattern Recognition models to time the market across multiple global exchanges | |
| Risk-Return Analysis View associations between returns expected from investment and the risk you assume |