Correlation Between Steel Authority and Premier Polyfilm
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By analyzing existing cross correlation between Steel Authority of and Premier Polyfilm Limited, you can compare the effects of market volatilities on Steel Authority and Premier Polyfilm 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 Premier Polyfilm. Check out your portfolio center. Please also check ongoing floating volatility patterns of Steel Authority and Premier Polyfilm.
Diversification Opportunities for Steel Authority and Premier Polyfilm
-0.36 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Steel and Premier is -0.36. Overlapping area represents the amount of risk that can be diversified away by holding Steel Authority of and Premier Polyfilm Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Premier Polyfilm 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 Premier Polyfilm. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Premier Polyfilm has no effect on the direction of Steel Authority i.e., Steel Authority and Premier Polyfilm go up and down completely randomly.
Pair Corralation between Steel Authority and Premier Polyfilm
Assuming the 90 days trading horizon Steel Authority of is expected to under-perform the Premier Polyfilm. But the stock apears to be less risky and, when comparing its historical volatility, Steel Authority of is 1.33 times less risky than Premier Polyfilm. The stock trades about -0.15 of its potential returns per unit of risk. The Premier Polyfilm Limited is currently generating about -0.08 of returns per unit of risk over similar time horizon. If you would invest 7,463 in Premier Polyfilm Limited on October 20, 2024 and sell it today you would lose (508.00) from holding Premier Polyfilm Limited or give up 6.81% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.45% |
| Values | Daily Returns |
Steel Authority of vs. Premier Polyfilm Limited
Performance |
| Timeline |
| Steel Authority |
| Premier Polyfilm |
Steel Authority and Premier Polyfilm Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Steel Authority and Premier Polyfilm
The main advantage of trading using opposite Steel Authority and Premier Polyfilm positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Steel Authority position performs unexpectedly, Premier Polyfilm 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 Premier Polyfilm will offset losses from the drop in Premier Polyfilm's long position.| Steel Authority vs. Dhunseri Investments Limited | Steel Authority vs. Popular Vehicles and | Steel Authority vs. AUTHUM INVESTMENT INFRASTRUCTU | Steel Authority vs. Landmark Cars Limited |
| Premier Polyfilm vs. NMDC Limited | Premier Polyfilm vs. Steel Authority of | Premier Polyfilm vs. Embassy Office Parks | Premier Polyfilm 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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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