Correlation Between Man Infraconstructio and Suzlon Energy
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By analyzing existing cross correlation between Man Infraconstruction Limited and Suzlon Energy Limited, you can compare the effects of market volatilities on Man Infraconstructio and Suzlon Energy 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 Man Infraconstructio with a short position of Suzlon Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Man Infraconstructio and Suzlon Energy.
Diversification Opportunities for Man Infraconstructio and Suzlon Energy
-0.04 | Correlation Coefficient |
Good diversification
The 3 months correlation between Man and Suzlon is -0.04. Overlapping area represents the amount of risk that can be diversified away by holding Man Infraconstruction Limited and Suzlon Energy Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Suzlon Energy Limited and Man Infraconstructio 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 Man Infraconstruction Limited are associated (or correlated) with Suzlon Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Suzlon Energy Limited has no effect on the direction of Man Infraconstructio i.e., Man Infraconstructio and Suzlon Energy go up and down completely randomly.
Pair Corralation between Man Infraconstructio and Suzlon Energy
Assuming the 90 days trading horizon Man Infraconstructio is expected to generate 1.76 times less return on investment than Suzlon Energy. But when comparing it to its historical volatility, Man Infraconstruction Limited is 1.23 times less risky than Suzlon Energy. It trades about 0.09 of its potential returns per unit of risk. Suzlon Energy Limited is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest 905.00 in Suzlon Energy Limited on October 25, 2024 and sell it today you would earn a total of 4,526 from holding Suzlon Energy Limited or generate 500.11% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.59% |
| Values | Daily Returns |
Man Infraconstruction Limited vs. Suzlon Energy Limited
Performance |
| Timeline |
| Man Infraconstruction |
| Suzlon Energy Limited |
Man Infraconstructio and Suzlon Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Man Infraconstructio and Suzlon Energy
The main advantage of trading using opposite Man Infraconstructio and Suzlon Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Man Infraconstructio position performs unexpectedly, Suzlon Energy 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 Suzlon Energy will offset losses from the drop in Suzlon Energy's long position.The idea behind Man Infraconstruction Limited and Suzlon Energy Limited pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
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