Correlation Between Power Finance and Sakar Healthcare
Can any of the company-specific risk be diversified away by investing in both Power Finance and Sakar Healthcare at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Power Finance and Sakar Healthcare into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Power Finance and Sakar Healthcare Limited, you can compare the effects of market volatilities on Power Finance and Sakar Healthcare 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 Power Finance with a short position of Sakar Healthcare. Check out your portfolio center. Please also check ongoing floating volatility patterns of Power Finance and Sakar Healthcare.
Diversification Opportunities for Power Finance and Sakar Healthcare
0.28 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Power and Sakar is 0.28. Overlapping area represents the amount of risk that can be diversified away by holding Power Finance and Sakar Healthcare Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sakar Healthcare and Power Finance 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 Power Finance are associated (or correlated) with Sakar Healthcare. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sakar Healthcare has no effect on the direction of Power Finance i.e., Power Finance and Sakar Healthcare go up and down completely randomly.
Pair Corralation between Power Finance and Sakar Healthcare
Assuming the 90 days trading horizon Power Finance is expected to generate 1.32 times more return on investment than Sakar Healthcare. However, Power Finance is 1.32 times more volatile than Sakar Healthcare Limited. It trades about 0.05 of its potential returns per unit of risk. Sakar Healthcare Limited is currently generating about -0.03 per unit of risk. If you would invest 37,178 in Power Finance on September 3, 2024 and sell it today you would earn a total of 12,352 from holding Power Finance or generate 33.22% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Power Finance vs. Sakar Healthcare Limited
Performance |
| Timeline |
| Power Finance |
| Sakar Healthcare |
Power Finance and Sakar Healthcare Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Power Finance and Sakar Healthcare
The main advantage of trading using opposite Power Finance and Sakar Healthcare positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Power Finance position performs unexpectedly, Sakar Healthcare 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 Sakar Healthcare will offset losses from the drop in Sakar Healthcare's long position.| Power Finance vs. Hisar Metal Industries | Power Finance vs. Ratnamani Metals Tubes | Power Finance vs. Credo Brands Marketing | Power Finance vs. LLOYDS METALS AND |
| Sakar Healthcare vs. Life Insurance | Sakar Healthcare vs. Power Finance | Sakar Healthcare vs. HDFC Bank Limited | Sakar Healthcare vs. State Bank of |
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 Transaction History module to view history of all your transactions and understand their impact on performance.
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