Correlation Between Electronics Mart and MIC Electronics
Can any of the company-specific risk be diversified away by investing in both Electronics Mart and MIC Electronics 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 MIC Electronics 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 MIC Electronics Limited, you can compare the effects of market volatilities on Electronics Mart and MIC 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 MIC Electronics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Electronics Mart and MIC Electronics.
Diversification Opportunities for Electronics Mart and MIC Electronics
0.12 | Correlation Coefficient |
Average diversification
The 3 months correlation between Electronics and MIC is 0.12. Overlapping area represents the amount of risk that can be diversified away by holding Electronics Mart India and MIC Electronics Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MIC 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 MIC Electronics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MIC Electronics has no effect on the direction of Electronics Mart i.e., Electronics Mart and MIC Electronics go up and down completely randomly.
Pair Corralation between Electronics Mart and MIC Electronics
Assuming the 90 days trading horizon Electronics Mart is expected to generate 20.51 times less return on investment than MIC Electronics. But when comparing it to its historical volatility, Electronics Mart India is 1.22 times less risky than MIC Electronics. It trades about 0.01 of its potential returns per unit of risk. MIC Electronics Limited is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest 3,980 in MIC Electronics Limited on August 25, 2024 and sell it today you would earn a total of 4,354 from holding MIC Electronics Limited or generate 109.4% 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. MIC Electronics Limited
Performance |
| Timeline |
| Electronics Mart India |
| MIC Electronics |
Electronics Mart and MIC Electronics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Electronics Mart and MIC Electronics
The main advantage of trading using opposite Electronics Mart and MIC Electronics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Electronics Mart position performs unexpectedly, MIC 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 MIC Electronics will offset losses from the drop in MIC Electronics' 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 |
| MIC Electronics vs. Life Insurance | MIC Electronics vs. Power Finance | MIC Electronics vs. HDFC Bank Limited | MIC Electronics vs. State Bank of |
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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
Other Complementary Tools
| Performance Analysis Check effects of mean-variance optimization against your current asset allocation | |
| Content Syndication Quickly integrate customizable finance content to your own investment portal | |
| USA ETFs Find actively traded Exchange Traded Funds (ETF) in USA | |
| Global Correlations Find global opportunities by holding instruments from different markets | |
| Analyst Advice Analyst recommendations and target price estimates broken down by several categories |