Correlation Between Rama Steel and Elin Electronics
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By analyzing existing cross correlation between Rama Steel Tubes and Elin Electronics Limited, you can compare the effects of market volatilities on Rama Steel and Elin 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 Rama Steel with a short position of Elin Electronics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Rama Steel and Elin Electronics.
Diversification Opportunities for Rama Steel and Elin Electronics
0.74 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Rama and Elin is 0.74. Overlapping area represents the amount of risk that can be diversified away by holding Rama Steel Tubes and Elin Electronics Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Elin Electronics and Rama Steel 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 Rama Steel Tubes are associated (or correlated) with Elin Electronics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Elin Electronics has no effect on the direction of Rama Steel i.e., Rama Steel and Elin Electronics go up and down completely randomly.
Pair Corralation between Rama Steel and Elin Electronics
Assuming the 90 days trading horizon Rama Steel Tubes is expected to generate 0.94 times more return on investment than Elin Electronics. However, Rama Steel Tubes is 1.06 times less risky than Elin Electronics. It trades about 0.01 of its potential returns per unit of risk. Elin Electronics Limited is currently generating about -0.24 per unit of risk. If you would invest 1,186 in Rama Steel Tubes on November 9, 2024 and sell it today you would lose (6.00) from holding Rama Steel Tubes or give up 0.51% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Rama Steel Tubes vs. Elin Electronics Limited
Performance |
| Timeline |
| Rama Steel Tubes |
| Elin Electronics |
Rama Steel and Elin Electronics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Rama Steel and Elin Electronics
The main advantage of trading using opposite Rama Steel and Elin Electronics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Rama Steel position performs unexpectedly, Elin 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 Elin Electronics will offset losses from the drop in Elin Electronics' long position.| Rama Steel vs. Kilitch Drugs Limited | Rama Steel vs. Usha Martin Education | Rama Steel vs. Dhunseri Investments Limited | Rama Steel vs. UTI Asset Management |
| Elin Electronics vs. Bajaj Holdings Investment | Elin Electronics vs. ILFS Investment Managers | Elin Electronics vs. Gallantt Ispat Limited | Elin Electronics vs. Industrial Investment Trust |
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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
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