Correlation Between Maruti Suzuki and Sarthak Metals
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By analyzing existing cross correlation between Maruti Suzuki India and Sarthak Metals Limited, you can compare the effects of market volatilities on Maruti Suzuki and Sarthak Metals 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 Maruti Suzuki with a short position of Sarthak Metals. Check out your portfolio center. Please also check ongoing floating volatility patterns of Maruti Suzuki and Sarthak Metals.
Diversification Opportunities for Maruti Suzuki and Sarthak Metals
0.65 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Maruti and Sarthak is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding Maruti Suzuki India and Sarthak Metals Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sarthak Metals and Maruti Suzuki 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 Maruti Suzuki India are associated (or correlated) with Sarthak Metals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sarthak Metals has no effect on the direction of Maruti Suzuki i.e., Maruti Suzuki and Sarthak Metals go up and down completely randomly.
Pair Corralation between Maruti Suzuki and Sarthak Metals
Assuming the 90 days trading horizon Maruti Suzuki India is expected to generate 0.4 times more return on investment than Sarthak Metals. However, Maruti Suzuki India is 2.5 times less risky than Sarthak Metals. It trades about 0.03 of its potential returns per unit of risk. Sarthak Metals Limited is currently generating about -0.03 per unit of risk. If you would invest 1,022,125 in Maruti Suzuki India on September 12, 2024 and sell it today you would earn a total of 97,695 from holding Maruti Suzuki India or generate 9.56% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Maruti Suzuki India vs. Sarthak Metals Limited
Performance |
| Timeline |
| Maruti Suzuki India |
| Sarthak Metals |
Maruti Suzuki and Sarthak Metals Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Maruti Suzuki and Sarthak Metals
The main advantage of trading using opposite Maruti Suzuki and Sarthak Metals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Maruti Suzuki position performs unexpectedly, Sarthak Metals 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 Sarthak Metals will offset losses from the drop in Sarthak Metals' long position.| Maruti Suzuki vs. Sarthak Metals Limited | Maruti Suzuki vs. Aarey Drugs Pharmaceuticals | Maruti Suzuki vs. Agarwal Industrial | Maruti Suzuki vs. Lakshmi Finance Industrial |
| Sarthak Metals vs. Reliance Industries Limited | Sarthak Metals vs. Oil Natural Gas | Sarthak Metals vs. Indo Borax Chemicals | Sarthak Metals vs. Kingfa Science Technology |
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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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