Correlation Between Elin Electronics and Sakar Healthcare
Can any of the company-specific risk be diversified away by investing in both Elin Electronics and Sakar Healthcare 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 Sakar Healthcare 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 Sakar Healthcare Limited, you can compare the effects of market volatilities on Elin Electronics and Sakar Healthcare 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 Sakar Healthcare. Check out your portfolio center. Please also check ongoing floating volatility patterns of Elin Electronics and Sakar Healthcare.
Diversification Opportunities for Elin Electronics and Sakar Healthcare
0.64 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Elin and Sakar is 0.64. Overlapping area represents the amount of risk that can be diversified away by holding Elin Electronics Limited and Sakar Healthcare Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sakar Healthcare 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 Sakar Healthcare. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sakar Healthcare has no effect on the direction of Elin Electronics i.e., Elin Electronics and Sakar Healthcare go up and down completely randomly.
Pair Corralation between Elin Electronics and Sakar Healthcare
Assuming the 90 days trading horizon Elin Electronics Limited is expected to under-perform the Sakar Healthcare. In addition to that, Elin Electronics is 1.66 times more volatile than Sakar Healthcare Limited. It trades about -0.29 of its total potential returns per unit of risk. Sakar Healthcare Limited is currently generating about -0.16 per unit of volatility. If you would invest 31,245 in Sakar Healthcare Limited on October 11, 2024 and sell it today you would lose (1,775) from holding Sakar Healthcare Limited or give up 5.68% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Elin Electronics Limited vs. Sakar Healthcare Limited
Performance |
| Timeline |
| Elin Electronics |
| Sakar Healthcare |
Elin Electronics and Sakar Healthcare Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Elin Electronics and Sakar Healthcare
The main advantage of trading using opposite Elin Electronics and Sakar Healthcare positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Elin Electronics position performs unexpectedly, Sakar Healthcare 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 Sakar Healthcare will offset losses from the drop in Sakar Healthcare's long position.| Elin Electronics vs. Som Distilleries Breweries | Elin Electronics vs. Indian Card Clothing | Elin Electronics vs. S P Apparels | Elin Electronics vs. Kewal Kiran Clothing |
| Sakar Healthcare vs. One 97 Communications | Sakar Healthcare vs. Aarti Drugs Limited | Sakar Healthcare vs. Elin Electronics Limited | Sakar Healthcare vs. Centum 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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
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