Correlation Between Patel Engineering and Elgi Rubber
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By analyzing existing cross correlation between Patel Engineering Limited and Elgi Rubber, you can compare the effects of market volatilities on Patel Engineering and Elgi Rubber 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 Patel Engineering with a short position of Elgi Rubber. Check out your portfolio center. Please also check ongoing floating volatility patterns of Patel Engineering and Elgi Rubber.
Diversification Opportunities for Patel Engineering and Elgi Rubber
-0.05 | Correlation Coefficient |
Good diversification
The 3 months correlation between Patel and Elgi is -0.05. Overlapping area represents the amount of risk that can be diversified away by holding Patel Engineering Limited and Elgi Rubber in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Elgi Rubber and Patel Engineering 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 Patel Engineering Limited are associated (or correlated) with Elgi Rubber. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Elgi Rubber has no effect on the direction of Patel Engineering i.e., Patel Engineering and Elgi Rubber go up and down completely randomly.
Pair Corralation between Patel Engineering and Elgi Rubber
Assuming the 90 days trading horizon Patel Engineering is expected to generate 6.81 times less return on investment than Elgi Rubber. But when comparing it to its historical volatility, Patel Engineering Limited is 3.42 times less risky than Elgi Rubber. It trades about 0.09 of its potential returns per unit of risk. Elgi Rubber is currently generating about 0.17 of returns per unit of risk over similar time horizon. If you would invest 9,234 in Elgi Rubber on September 2, 2024 and sell it today you would earn a total of 2,013 from holding Elgi Rubber or generate 21.8% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Patel Engineering Limited vs. Elgi Rubber
Performance |
| Timeline |
| Patel Engineering |
| Elgi Rubber |
Patel Engineering and Elgi Rubber Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Patel Engineering and Elgi Rubber
The main advantage of trading using opposite Patel Engineering and Elgi Rubber positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Patel Engineering position performs unexpectedly, Elgi Rubber 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 Elgi Rubber will offset losses from the drop in Elgi Rubber's long position.| Patel Engineering vs. Modi Rubber Limited | Patel Engineering vs. Orient Technologies Limited | Patel Engineering vs. PB Fintech Limited | Patel Engineering vs. Mtar Technologies Limited |
| Elgi Rubber vs. Kingfa Science Technology | Elgi Rubber vs. Rico Auto Industries | Elgi Rubber vs. GACM Technologies Limited | Elgi Rubber vs. COSMO FIRST 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 Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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