Correlation Between HMT and Centum Electronics
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By analyzing existing cross correlation between HMT Limited and Centum Electronics Limited, you can compare the effects of market volatilities on HMT and Centum 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 HMT with a short position of Centum Electronics. Check out your portfolio center. Please also check ongoing floating volatility patterns of HMT and Centum Electronics.
Diversification Opportunities for HMT and Centum Electronics
0.03 | Correlation Coefficient |
Significant diversification
The 3 months correlation between HMT and Centum is 0.03. Overlapping area represents the amount of risk that can be diversified away by holding HMT Limited and Centum Electronics Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Centum Electronics and HMT 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 HMT Limited are associated (or correlated) with Centum Electronics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Centum Electronics has no effect on the direction of HMT i.e., HMT and Centum Electronics go up and down completely randomly.
Pair Corralation between HMT and Centum Electronics
Assuming the 90 days trading horizon HMT Limited is expected to under-perform the Centum Electronics. But the stock apears to be less risky and, when comparing its historical volatility, HMT Limited is 1.73 times less risky than Centum Electronics. The stock trades about -0.07 of its potential returns per unit of risk. The Centum Electronics Limited is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest 178,515 in Centum Electronics Limited on November 6, 2024 and sell it today you would lose (7,095) from holding Centum Electronics Limited or give up 3.97% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
HMT Limited vs. Centum Electronics Limited
Performance |
| Timeline |
| HMT Limited |
| Centum Electronics |
HMT and Centum Electronics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with HMT and Centum Electronics
The main advantage of trading using opposite HMT and Centum Electronics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if HMT position performs unexpectedly, Centum 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 Centum Electronics will offset losses from the drop in Centum Electronics' long position.| HMT vs. LLOYDS METALS AND | HMT vs. Nahar Industrial Enterprises | HMT vs. Akme Fintrade India | HMT vs. Baazar Style Retail |
| Centum Electronics vs. Foods Inns Limited | Centum Electronics vs. Jayant Agro Organics | Centum Electronics vs. Jubilant Foodworks Limited | Centum Electronics vs. Kohinoor Foods 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 Global Correlations module to find global opportunities by holding instruments from different markets.
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