Correlation Between Electronics Mart and Dixon Technologies
Can any of the company-specific risk be diversified away by investing in both Electronics Mart and Dixon Technologies 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 Electronics Mart and Dixon Technologies into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Electronics Mart India and Dixon Technologies Limited, you can compare the effects of market volatilities on Electronics Mart and Dixon Technologies 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 Dixon Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of Electronics Mart and Dixon Technologies.
Diversification Opportunities for Electronics Mart and Dixon Technologies
0.14 | Correlation Coefficient |
Average diversification
The 3 months correlation between Electronics and Dixon is 0.14. Overlapping area represents the amount of risk that can be diversified away by holding Electronics Mart India and Dixon Technologies Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dixon Technologies 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 Dixon Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dixon Technologies has no effect on the direction of Electronics Mart i.e., Electronics Mart and Dixon Technologies go up and down completely randomly.
Pair Corralation between Electronics Mart and Dixon Technologies
Assuming the 90 days trading horizon Electronics Mart is expected to generate 1.91 times less return on investment than Dixon Technologies. In addition to that, Electronics Mart is 1.17 times more volatile than Dixon Technologies Limited. It trades about 0.07 of its total potential returns per unit of risk. Dixon Technologies Limited is currently generating about 0.16 per unit of volatility. If you would invest 270,301 in Dixon Technologies Limited on November 9, 2024 and sell it today you would earn a total of 1,195,484 from holding Dixon Technologies Limited or generate 442.28% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Electronics Mart India vs. Dixon Technologies Limited
Performance |
| Timeline |
| Electronics Mart India |
| Dixon Technologies |
Electronics Mart and Dixon Technologies Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Electronics Mart and Dixon Technologies
The main advantage of trading using opposite Electronics Mart and Dixon Technologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Electronics Mart position performs unexpectedly, Dixon Technologies 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 Dixon Technologies will offset losses from the drop in Dixon Technologies' long position.| Electronics Mart vs. The Investment Trust | Electronics Mart vs. Tube Investments of | Electronics Mart vs. AUTHUM INVESTMENT INFRASTRUCTU | Electronics Mart vs. Ratnamani Metals Tubes |
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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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
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