Correlation Between Prakash Steelage and SAL Steel
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By analyzing existing cross correlation between Prakash Steelage Limited and SAL Steel Limited, you can compare the effects of market volatilities on Prakash Steelage and SAL Steel 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 Prakash Steelage with a short position of SAL Steel. Check out your portfolio center. Please also check ongoing floating volatility patterns of Prakash Steelage and SAL Steel.
Diversification Opportunities for Prakash Steelage and SAL Steel
0.85 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Prakash and SAL is 0.85. Overlapping area represents the amount of risk that can be diversified away by holding Prakash Steelage Limited and SAL Steel Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SAL Steel Limited and Prakash Steelage 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 Prakash Steelage Limited are associated (or correlated) with SAL Steel. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SAL Steel Limited has no effect on the direction of Prakash Steelage i.e., Prakash Steelage and SAL Steel go up and down completely randomly.
Pair Corralation between Prakash Steelage and SAL Steel
Assuming the 90 days trading horizon Prakash Steelage Limited is expected to generate 0.97 times more return on investment than SAL Steel. However, Prakash Steelage Limited is 1.04 times less risky than SAL Steel. It trades about 0.05 of its potential returns per unit of risk. SAL Steel Limited is currently generating about 0.03 per unit of risk. If you would invest 415.00 in Prakash Steelage Limited on November 27, 2024 and sell it today you would earn a total of 321.00 from holding Prakash Steelage Limited or generate 77.35% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Prakash Steelage Limited vs. SAL Steel Limited
Performance |
| Timeline |
| Prakash Steelage |
| SAL Steel Limited |
Prakash Steelage and SAL Steel Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Prakash Steelage and SAL Steel
The main advantage of trading using opposite Prakash Steelage and SAL Steel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Prakash Steelage position performs unexpectedly, SAL Steel 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 SAL Steel will offset losses from the drop in SAL Steel's long position.| Prakash Steelage vs. Consolidated Construction Consortium | Prakash Steelage vs. MIRC Electronics Limited | Prakash Steelage vs. G Tec Jainx Education | Prakash Steelage vs. Usha Martin Education |
| SAL Steel vs. Jindal Drilling And | SAL Steel vs. VIP Clothing Limited | SAL Steel vs. Tree House Education | SAL Steel vs. NRB Industrial Bearings |
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 Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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