Correlation Between Steel Authority and Orient Technologies
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By analyzing existing cross correlation between Steel Authority of and Orient Technologies Limited, you can compare the effects of market volatilities on Steel Authority and Orient Technologies 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 Orient Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of Steel Authority and Orient Technologies.
Diversification Opportunities for Steel Authority and Orient Technologies
-0.57 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Steel and Orient is -0.57. Overlapping area represents the amount of risk that can be diversified away by holding Steel Authority of and Orient Technologies Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Orient Technologies 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 Orient Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Orient Technologies has no effect on the direction of Steel Authority i.e., Steel Authority and Orient Technologies go up and down completely randomly.
Pair Corralation between Steel Authority and Orient Technologies
Assuming the 90 days trading horizon Steel Authority of is expected to under-perform the Orient Technologies. But the stock apears to be less risky and, when comparing its historical volatility, Steel Authority of is 2.47 times less risky than Orient Technologies. The stock trades about -0.39 of its potential returns per unit of risk. The Orient Technologies Limited is currently generating about 0.35 of returns per unit of risk over similar time horizon. If you would invest 42,170 in Orient Technologies Limited on October 12, 2024 and sell it today you would earn a total of 15,115 from holding Orient Technologies Limited or generate 35.84% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 95.24% |
| Values | Daily Returns |
Steel Authority of vs. Orient Technologies Limited
Performance |
| Timeline |
| Steel Authority |
| Orient Technologies |
Steel Authority and Orient Technologies Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Steel Authority and Orient Technologies
The main advantage of trading using opposite Steel Authority and Orient Technologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Steel Authority position performs unexpectedly, Orient Technologies 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 Orient Technologies will offset losses from the drop in Orient Technologies' long position.| Steel Authority vs. Univa Foods Limited | Steel Authority vs. Apollo Hospitals Enterprise | Steel Authority vs. Bajaj Healthcare Limited | Steel Authority vs. Fortis Healthcare Limited |
| Orient Technologies vs. Steel Authority of | Orient Technologies vs. Kalyani Steels Limited | Orient Technologies vs. Uniinfo Telecom Services | Orient Technologies vs. Tamilnadu Telecommunication 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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
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