Correlation Between Hi Tech and Electrosteel Castings
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By analyzing existing cross correlation between Hi Tech Pipes Limited and Electrosteel Castings Limited, you can compare the effects of market volatilities on Hi Tech and Electrosteel Castings 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 Hi Tech with a short position of Electrosteel Castings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hi Tech and Electrosteel Castings.
Diversification Opportunities for Hi Tech and Electrosteel Castings
0.86 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between HITECH and Electrosteel is 0.86. Overlapping area represents the amount of risk that can be diversified away by holding Hi Tech Pipes Limited and Electrosteel Castings Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Electrosteel Castings and Hi Tech 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 Hi Tech Pipes Limited are associated (or correlated) with Electrosteel Castings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Electrosteel Castings has no effect on the direction of Hi Tech i.e., Hi Tech and Electrosteel Castings go up and down completely randomly.
Pair Corralation between Hi Tech and Electrosteel Castings
Assuming the 90 days trading horizon Hi Tech Pipes Limited is expected to under-perform the Electrosteel Castings. But the stock apears to be less risky and, when comparing its historical volatility, Hi Tech Pipes Limited is 1.31 times less risky than Electrosteel Castings. The stock trades about -0.02 of its potential returns per unit of risk. The Electrosteel Castings Limited is currently generating about 0.23 of returns per unit of risk over similar time horizon. If you would invest 14,913 in Electrosteel Castings Limited on September 13, 2024 and sell it today you would earn a total of 1,897 from holding Electrosteel Castings Limited or generate 12.72% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hi Tech Pipes Limited vs. Electrosteel Castings Limited
Performance |
| Timeline |
| Hi Tech Pipes |
| Electrosteel Castings |
Hi Tech and Electrosteel Castings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hi Tech and Electrosteel Castings
The main advantage of trading using opposite Hi Tech and Electrosteel Castings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hi Tech position performs unexpectedly, Electrosteel Castings 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 Electrosteel Castings will offset losses from the drop in Electrosteel Castings' long position.| Hi Tech vs. NMDC Limited | Hi Tech vs. Steel Authority of | Hi Tech vs. Embassy Office Parks | Hi Tech vs. Gujarat Narmada Valley |
| Electrosteel Castings vs. NMDC Limited | Electrosteel Castings vs. Steel Authority of | Electrosteel Castings vs. Embassy Office Parks | Electrosteel Castings vs. Gujarat Narmada Valley |
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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
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