Correlation Between Newgen Software and Salzer Electronics
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By analyzing existing cross correlation between Newgen Software Technologies and Salzer Electronics Limited, you can compare the effects of market volatilities on Newgen Software 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 Newgen Software with a short position of Salzer Electronics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Newgen Software and Salzer Electronics.
Diversification Opportunities for Newgen Software and Salzer Electronics
-0.21 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Newgen and Salzer is -0.21. Overlapping area represents the amount of risk that can be diversified away by holding Newgen Software Technologies and Salzer Electronics Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Salzer Electronics 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 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 Newgen Software i.e., Newgen Software and Salzer Electronics go up and down completely randomly.
Pair Corralation between Newgen Software and Salzer Electronics
Assuming the 90 days trading horizon Newgen Software Technologies is expected to under-perform the Salzer Electronics. In addition to that, Newgen Software is 1.62 times more volatile than Salzer Electronics Limited. It trades about -0.06 of its total potential returns per unit of risk. Salzer Electronics Limited is currently generating about 0.03 per unit of volatility. If you would invest 104,380 in Salzer Electronics Limited on August 29, 2024 and sell it today you would earn a total of 890.00 from holding Salzer Electronics Limited or generate 0.85% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Newgen Software Technologies vs. Salzer Electronics Limited
Performance |
| Timeline |
| Newgen Software Tech |
| Salzer Electronics |
Newgen Software and Salzer Electronics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Newgen Software and Salzer Electronics
The main advantage of trading using opposite Newgen Software and Salzer Electronics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Newgen Software 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.| Newgen Software vs. Reliance Industries Limited | Newgen Software vs. HDFC Bank Limited | Newgen Software vs. Tata Consultancy Services | Newgen Software vs. Bharti Airtel Limited |
| Salzer Electronics vs. Patanjali Foods Limited | Salzer Electronics vs. Varun Beverages Limited | Salzer Electronics vs. LLOYDS METALS AND | Salzer Electronics vs. BF Utilities 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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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