Correlation Between Electronics Mart and Hindustan Foods
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By analyzing existing cross correlation between Electronics Mart India and Hindustan Foods Limited, you can compare the effects of market volatilities on Electronics Mart and Hindustan Foods 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 Hindustan Foods. Check out your portfolio center. Please also check ongoing floating volatility patterns of Electronics Mart and Hindustan Foods.
Diversification Opportunities for Electronics Mart and Hindustan Foods
0.46 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Electronics and Hindustan is 0.46. Overlapping area represents the amount of risk that can be diversified away by holding Electronics Mart India and Hindustan Foods Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hindustan Foods 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 Hindustan Foods. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hindustan Foods has no effect on the direction of Electronics Mart i.e., Electronics Mart and Hindustan Foods go up and down completely randomly.
Pair Corralation between Electronics Mart and Hindustan Foods
Assuming the 90 days trading horizon Electronics Mart India is expected to generate 1.61 times more return on investment than Hindustan Foods. However, Electronics Mart is 1.61 times more volatile than Hindustan Foods Limited. It trades about -0.12 of its potential returns per unit of risk. Hindustan Foods Limited is currently generating about -0.25 per unit of risk. If you would invest 21,041 in Electronics Mart India on August 28, 2024 and sell it today you would lose (3,491) from holding Electronics Mart India or give up 16.59% 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. Hindustan Foods Limited
Performance |
| Timeline |
| Electronics Mart India |
| Hindustan Foods |
Electronics Mart and Hindustan Foods Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Electronics Mart and Hindustan Foods
The main advantage of trading using opposite Electronics Mart and Hindustan Foods positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Electronics Mart position performs unexpectedly, Hindustan Foods 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 Hindustan Foods will offset losses from the drop in Hindustan Foods' long position.| Electronics Mart vs. Kingfa Science Technology | Electronics Mart vs. Rico Auto Industries | Electronics Mart vs. GACM Technologies Limited | Electronics Mart vs. COSMO FIRST LIMITED |
| Hindustan Foods vs. State Bank of | Hindustan Foods vs. Life Insurance | Hindustan Foods vs. HDFC Bank Limited | Hindustan Foods vs. ICICI Bank 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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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