Correlation Between Steel Authority and Hi Tech
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By analyzing existing cross correlation between Steel Authority of and Hi Tech Pipes Limited, you can compare the effects of market volatilities on Steel Authority and Hi Tech 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 Hi Tech. Check out your portfolio center. Please also check ongoing floating volatility patterns of Steel Authority and Hi Tech.
Diversification Opportunities for Steel Authority and Hi Tech
0.64 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Steel and HITECH is 0.64. Overlapping area represents the amount of risk that can be diversified away by holding Steel Authority of and Hi Tech Pipes Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hi Tech Pipes 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 Hi Tech. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hi Tech Pipes has no effect on the direction of Steel Authority i.e., Steel Authority and Hi Tech go up and down completely randomly.
Pair Corralation between Steel Authority and Hi Tech
Assuming the 90 days trading horizon Steel Authority of is expected to generate 0.75 times more return on investment than Hi Tech. However, Steel Authority of is 1.33 times less risky than Hi Tech. It trades about -0.19 of its potential returns per unit of risk. Hi Tech Pipes Limited is currently generating about -0.17 per unit of risk. If you would invest 12,119 in Steel Authority of on October 23, 2024 and sell it today you would lose (1,131) from holding Steel Authority of or give up 9.33% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 90.48% |
| Values | Daily Returns |
Steel Authority of vs. Hi Tech Pipes Limited
Performance |
| Timeline |
| Steel Authority |
| Hi Tech Pipes |
Steel Authority and Hi Tech Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Steel Authority and Hi Tech
The main advantage of trading using opposite Steel Authority and Hi Tech positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Steel Authority position performs unexpectedly, Hi Tech 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 Hi Tech will offset losses from the drop in Hi Tech's long position.| Steel Authority vs. NRB Industrial Bearings | Steel Authority vs. Industrial Investment Trust | Steel Authority vs. Rajnandini Metal Limited | Steel Authority vs. Hilton Metal Forging |
| Hi Tech vs. NMDC Limited | Hi Tech vs. Steel Authority of | Hi Tech vs. Embassy Office Parks | Hi Tech vs. Jai Balaji Industries |
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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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