Correlation Between Steel Authority and 20 Microns
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By analyzing existing cross correlation between Steel Authority of and 20 Microns Limited, you can compare the effects of market volatilities on Steel Authority and 20 Microns 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 Steel Authority with a short position of 20 Microns. Check out your portfolio center. Please also check ongoing floating volatility patterns of Steel Authority and 20 Microns.
Diversification Opportunities for Steel Authority and 20 Microns
0.71 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Steel and 20MICRONS is 0.71. Overlapping area represents the amount of risk that can be diversified away by holding Steel Authority of and 20 Microns Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on 20 Microns Limited and Steel Authority 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 Steel Authority of are associated (or correlated) with 20 Microns. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of 20 Microns Limited has no effect on the direction of Steel Authority i.e., Steel Authority and 20 Microns go up and down completely randomly.
Pair Corralation between Steel Authority and 20 Microns
Assuming the 90 days trading horizon Steel Authority of is expected to generate 1.02 times more return on investment than 20 Microns. However, Steel Authority is 1.02 times more volatile than 20 Microns Limited. It trades about 0.05 of its potential returns per unit of risk. 20 Microns Limited is currently generating about -0.06 per unit of risk. If you would invest 10,343 in Steel Authority of on November 28, 2024 and sell it today you would earn a total of 274.00 from holding Steel Authority of or generate 2.65% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Steel Authority of vs. 20 Microns Limited
Performance |
| Timeline |
| Steel Authority |
| 20 Microns Limited |
Steel Authority and 20 Microns Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Steel Authority and 20 Microns
The main advantage of trading using opposite Steel Authority and 20 Microns positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Steel Authority position performs unexpectedly, 20 Microns 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 20 Microns will offset losses from the drop in 20 Microns' long position.| Steel Authority vs. Manaksia Steels Limited | Steel Authority vs. Tips Music Limited | Steel Authority vs. Mahamaya Steel Industries | Steel Authority vs. Tata Communications Limited |
| 20 Microns vs. Alkali Metals Limited | 20 Microns vs. Khaitan Chemicals Fertilizers | 20 Microns vs. Hisar Metal Industries | 20 Microns vs. Landmark Cars 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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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