Correlation Between Electronics Mart and Centum Electronics
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By analyzing existing cross correlation between Electronics Mart India and Centum Electronics Limited, you can compare the effects of market volatilities on Electronics Mart and Centum Electronics 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 Electronics Mart with a short position of Centum Electronics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Electronics Mart and Centum Electronics.
Diversification Opportunities for Electronics Mart and Centum Electronics
0.44 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Electronics and Centum is 0.44. Overlapping area represents the amount of risk that can be diversified away by holding Electronics Mart India and Centum Electronics Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Centum Electronics and Electronics Mart 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 Electronics Mart India are associated (or correlated) with Centum Electronics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Centum Electronics has no effect on the direction of Electronics Mart i.e., Electronics Mart and Centum Electronics go up and down completely randomly.
Pair Corralation between Electronics Mart and Centum Electronics
Assuming the 90 days trading horizon Electronics Mart India is expected to generate 1.08 times more return on investment than Centum Electronics. However, Electronics Mart is 1.08 times more volatile than Centum Electronics Limited. It trades about -0.12 of its potential returns per unit of risk. Centum Electronics Limited is currently generating about -0.15 per unit of risk. If you would invest 20,656 in Electronics Mart India on August 29, 2024 and sell it today you would lose (3,351) from holding Electronics Mart India or give up 16.22% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Electronics Mart India vs. Centum Electronics Limited
Performance |
| Timeline |
| Electronics Mart India |
| Centum Electronics |
Electronics Mart and Centum Electronics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Electronics Mart and Centum Electronics
The main advantage of trading using opposite Electronics Mart and Centum Electronics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Electronics Mart position performs unexpectedly, Centum Electronics 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 Centum Electronics will offset losses from the drop in Centum Electronics' long position.| Electronics Mart vs. Hemisphere Properties India | Electronics Mart vs. India Glycols Limited | Electronics Mart vs. Indo Borax Chemicals | Electronics Mart vs. Kingfa Science Technology |
| Centum Electronics vs. Reliance Industries Limited | Centum Electronics vs. Life Insurance | Centum Electronics vs. India Glycols Limited | Centum Electronics vs. Indo Borax Chemicals |
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 Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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