Correlation Between MRF and Salzer Electronics
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By analyzing existing cross correlation between MRF Limited and Salzer Electronics Limited, you can compare the effects of market volatilities on MRF and Salzer 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 MRF with a short position of Salzer Electronics. Check out your portfolio center. Please also check ongoing floating volatility patterns of MRF and Salzer Electronics.
Diversification Opportunities for MRF and Salzer Electronics
0.14 | Correlation Coefficient |
Average diversification
The 3 months correlation between MRF and Salzer is 0.14. Overlapping area represents the amount of risk that can be diversified away by holding MRF Limited and Salzer Electronics Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Salzer Electronics and MRF 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 MRF Limited are associated (or correlated) with Salzer Electronics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Salzer Electronics has no effect on the direction of MRF i.e., MRF and Salzer Electronics go up and down completely randomly.
Pair Corralation between MRF and Salzer Electronics
Assuming the 90 days trading horizon MRF Limited is expected to under-perform the Salzer Electronics. But the stock apears to be less risky and, when comparing its historical volatility, MRF Limited is 3.3 times less risky than Salzer Electronics. The stock trades about -0.65 of its potential returns per unit of risk. The Salzer Electronics Limited is currently generating about -0.05 of returns per unit of risk over similar time horizon. If you would invest 150,585 in Salzer Electronics Limited on October 25, 2024 and sell it today you would lose (7,675) from holding Salzer Electronics Limited or give up 5.1% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 95.24% |
| Values | Daily Returns |
MRF Limited vs. Salzer Electronics Limited
Performance |
| Timeline |
| MRF Limited |
| Salzer Electronics |
MRF and Salzer Electronics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with MRF and Salzer Electronics
The main advantage of trading using opposite MRF and Salzer Electronics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MRF position performs unexpectedly, Salzer 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 Salzer Electronics will offset losses from the drop in Salzer Electronics' long position.| MRF vs. Ratnamani Metals Tubes | MRF vs. Alkali Metals Limited | MRF vs. Bombay Burmah Trading | MRF vs. POWERGRID Infrastructure Investment |
| Salzer Electronics vs. Reliance Industries Limited | Salzer Electronics vs. Tata Consultancy Services | Salzer Electronics vs. HDFC Bank Limited | Salzer Electronics vs. Bharti Airtel 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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
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