Correlation Between Hi Tech and Sterling
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By analyzing existing cross correlation between The Hi Tech Gears and Sterling and Wilson, you can compare the effects of market volatilities on Hi Tech and Sterling 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 Sterling. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hi Tech and Sterling.
Diversification Opportunities for Hi Tech and Sterling
Significant diversification
The 3 months correlation between HITECHGEAR and Sterling is 0.08. Overlapping area represents the amount of risk that can be diversified away by holding The Hi Tech Gears and Sterling and Wilson in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sterling and Wilson 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 The Hi Tech Gears are associated (or correlated) with Sterling. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sterling and Wilson has no effect on the direction of Hi Tech i.e., Hi Tech and Sterling go up and down completely randomly.
Pair Corralation between Hi Tech and Sterling
Assuming the 90 days trading horizon The Hi Tech Gears is expected to generate 0.54 times more return on investment than Sterling. However, The Hi Tech Gears is 1.85 times less risky than Sterling. It trades about -0.13 of its potential returns per unit of risk. Sterling and Wilson is currently generating about -0.28 per unit of risk. If you would invest 80,875 in The Hi Tech Gears on October 26, 2024 and sell it today you would lose (4,800) from holding The Hi Tech Gears or give up 5.94% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 95.24% |
| Values | Daily Returns |
The Hi Tech Gears vs. Sterling and Wilson
Performance |
| Timeline |
| Hi Tech |
| Sterling and Wilson |
Hi Tech and Sterling Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hi Tech and Sterling
The main advantage of trading using opposite Hi Tech and Sterling positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hi Tech position performs unexpectedly, Sterling 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 Sterling will offset losses from the drop in Sterling's long position.| Hi Tech vs. Reliance Industries Limited | Hi Tech vs. Tata Consultancy Services | Hi Tech vs. HDFC Bank Limited | Hi Tech vs. Bharti Airtel Limited |
| Sterling vs. MRF Limited | Sterling vs. JSW Holdings Limited | Sterling vs. Maharashtra Scooters Limited | Sterling vs. Nalwa Sons Investments |
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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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