Correlation Between General Insurance and Salzer Electronics
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By analyzing existing cross correlation between General Insurance and Salzer Electronics Limited, you can compare the effects of market volatilities on General Insurance and Salzer 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 General Insurance with a short position of Salzer Electronics. Check out your portfolio center. Please also check ongoing floating volatility patterns of General Insurance and Salzer Electronics.
Diversification Opportunities for General Insurance and Salzer Electronics
0.15 | Correlation Coefficient |
Average diversification
The 3 months correlation between General and Salzer is 0.15. Overlapping area represents the amount of risk that can be diversified away by holding General Insurance and Salzer Electronics Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Salzer Electronics and General Insurance 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 General Insurance are associated (or correlated) with Salzer Electronics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Salzer Electronics has no effect on the direction of General Insurance i.e., General Insurance and Salzer Electronics go up and down completely randomly.
Pair Corralation between General Insurance and Salzer Electronics
Assuming the 90 days trading horizon General Insurance is expected to under-perform the Salzer Electronics. But the stock apears to be less risky and, when comparing its historical volatility, General Insurance is 1.37 times less risky than Salzer Electronics. The stock trades about -0.01 of its potential returns per unit of risk. The Salzer Electronics Limited is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 105,645 in Salzer Electronics Limited on September 3, 2024 and sell it today you would earn a total of 6,145 from holding Salzer Electronics Limited or generate 5.82% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
General Insurance vs. Salzer Electronics Limited
Performance |
| Timeline |
| General Insurance |
| Salzer Electronics |
General Insurance and Salzer Electronics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with General Insurance and Salzer Electronics
The main advantage of trading using opposite General Insurance and Salzer Electronics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if General Insurance position performs unexpectedly, Salzer 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 Salzer Electronics will offset losses from the drop in Salzer Electronics' long position.| General Insurance vs. Tata Communications Limited | General Insurance vs. Kalyani Steels Limited | General Insurance vs. KNR Constructions Limited | General Insurance vs. Bigbloc Construction Limited |
| Salzer Electronics vs. General Insurance | Salzer Electronics vs. Pritish Nandy Communications | Salzer Electronics vs. Tata Communications Limited | Salzer Electronics vs. BF Utilities 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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
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