Correlation Between Newgen Software and DCB Bank
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By analyzing existing cross correlation between Newgen Software Technologies and DCB Bank Limited, you can compare the effects of market volatilities on Newgen Software and DCB Bank 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 Newgen Software with a short position of DCB Bank. Check out your portfolio center. Please also check ongoing floating volatility patterns of Newgen Software and DCB Bank.
Diversification Opportunities for Newgen Software and DCB Bank
0.24 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Newgen and DCB is 0.24. Overlapping area represents the amount of risk that can be diversified away by holding Newgen Software Technologies and DCB Bank Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on DCB Bank Limited and Newgen Software 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 Newgen Software Technologies are associated (or correlated) with DCB Bank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of DCB Bank Limited has no effect on the direction of Newgen Software i.e., Newgen Software and DCB Bank go up and down completely randomly.
Pair Corralation between Newgen Software and DCB Bank
Assuming the 90 days trading horizon Newgen Software Technologies is expected to generate 2.4 times more return on investment than DCB Bank. However, Newgen Software is 2.4 times more volatile than DCB Bank Limited. It trades about 0.31 of its potential returns per unit of risk. DCB Bank Limited is currently generating about -0.53 per unit of risk. If you would invest 139,035 in Newgen Software Technologies on October 14, 2024 and sell it today you would earn a total of 23,625 from holding Newgen Software Technologies or generate 16.99% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Newgen Software Technologies vs. DCB Bank Limited
Performance |
| Timeline |
| Newgen Software Tech |
| DCB Bank Limited |
Newgen Software and DCB Bank Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Newgen Software and DCB Bank
The main advantage of trading using opposite Newgen Software and DCB Bank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Newgen Software position performs unexpectedly, DCB Bank 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 DCB Bank will offset losses from the drop in DCB Bank's long position.| Newgen Software vs. Network18 Media Investments | Newgen Software vs. AUTHUM INVESTMENT INFRASTRUCTU | Newgen Software vs. HDFC Asset Management | Newgen Software vs. The State Trading |
| DCB Bank vs. Newgen Software Technologies | DCB Bank vs. Kalyani Investment | DCB Bank vs. UTI Asset Management | DCB Bank vs. California Software |
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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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