Correlation Between Sakar Healthcare and Indian Railway
Can any of the company-specific risk be diversified away by investing in both Sakar Healthcare and Indian Railway at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Sakar Healthcare and Indian Railway into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sakar Healthcare Limited and Indian Railway Finance, you can compare the effects of market volatilities on Sakar Healthcare and Indian Railway 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 Sakar Healthcare with a short position of Indian Railway. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sakar Healthcare and Indian Railway.
Diversification Opportunities for Sakar Healthcare and Indian Railway
0.63 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Sakar and Indian is 0.63. Overlapping area represents the amount of risk that can be diversified away by holding Sakar Healthcare Limited and Indian Railway Finance in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Indian Railway Finance and Sakar Healthcare 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 Sakar Healthcare Limited are associated (or correlated) with Indian Railway. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Indian Railway Finance has no effect on the direction of Sakar Healthcare i.e., Sakar Healthcare and Indian Railway go up and down completely randomly.
Pair Corralation between Sakar Healthcare and Indian Railway
Assuming the 90 days trading horizon Sakar Healthcare Limited is expected to under-perform the Indian Railway. But the stock apears to be less risky and, when comparing its historical volatility, Sakar Healthcare Limited is 1.43 times less risky than Indian Railway. The stock trades about -0.01 of its potential returns per unit of risk. The Indian Railway Finance is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 9,922 in Indian Railway Finance on September 14, 2024 and sell it today you would earn a total of 6,351 from holding Indian Railway Finance or generate 64.01% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 99.18% |
| Values | Daily Returns |
Sakar Healthcare Limited vs. Indian Railway Finance
Performance |
| Timeline |
| Sakar Healthcare |
| Indian Railway Finance |
Sakar Healthcare and Indian Railway Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sakar Healthcare and Indian Railway
The main advantage of trading using opposite Sakar Healthcare and Indian Railway positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sakar Healthcare position performs unexpectedly, Indian Railway 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 Indian Railway will offset losses from the drop in Indian Railway's long position.| Sakar Healthcare vs. Kingfa Science Technology | Sakar Healthcare vs. Rico Auto Industries | Sakar Healthcare vs. GACM Technologies Limited | Sakar Healthcare vs. COSMO FIRST LIMITED |
| Indian Railway vs. Can Fin Homes | Indian Railway vs. EMBASSY OFFICE PARKS | Indian Railway vs. Himadri Speciality Chemical | Indian Railway vs. Next Mediaworks 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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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