Correlation Between SAL Steel and 20 Microns

Specify exactly 2 symbols:
Can any of the company-specific risk be diversified away by investing in both SAL Steel and 20 Microns 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 SAL Steel and 20 Microns into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SAL Steel Limited and 20 Microns Limited, you can compare the effects of market volatilities on SAL Steel 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 SAL Steel with a short position of 20 Microns. Check out your portfolio center. Please also check ongoing floating volatility patterns of SAL Steel and 20 Microns.

Diversification Opportunities for SAL Steel and 20 Microns

0.04
  Correlation Coefficient

Significant diversification

The 3 months correlation between SAL and 20MICRONS is 0.04. Overlapping area represents the amount of risk that can be diversified away by holding SAL Steel Limited 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 SAL Steel 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 SAL Steel Limited 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 SAL Steel i.e., SAL Steel and 20 Microns go up and down completely randomly.

Pair Corralation between SAL Steel and 20 Microns

Assuming the 90 days trading horizon SAL Steel is expected to generate 1.23 times less return on investment than 20 Microns. In addition to that, SAL Steel is 1.07 times more volatile than 20 Microns Limited. It trades about 0.06 of its total potential returns per unit of risk. 20 Microns Limited is currently generating about 0.07 per unit of volatility. If you would invest  9,703  in 20 Microns Limited on September 3, 2024 and sell it today you would earn a total of  13,652  from holding 20 Microns Limited or generate 140.7% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthInsignificant
Accuracy99.8%
ValuesDaily Returns

SAL Steel Limited  vs.  20 Microns Limited

 Performance 
       Timeline  
SAL Steel Limited 

Risk-Adjusted Performance

5 of 100

 
Weak
 
Strong
Modest
Compared to the overall equity markets, risk-adjusted returns on investments in SAL Steel Limited are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of rather uncertain technical and fundamental indicators, SAL Steel exhibited solid returns over the last few months and may actually be approaching a breakup point.
20 Microns Limited 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days 20 Microns Limited has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of uncertain performance in the last few months, the Stock's basic indicators remain very healthy which may send shares a bit higher in January 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

SAL Steel and 20 Microns Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with SAL Steel and 20 Microns

The main advantage of trading using opposite SAL Steel and 20 Microns positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SAL Steel 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.
SAL Steel vs. NMDC Limited
SAL Steel vs. Steel Authority of
SAL Steel vs. Embassy Office Parks
SAL Steel vs. Indian Metals Ferro
The idea behind SAL Steel Limited and 20 Microns Limited pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
20 Microns vs. NMDC Limited
20 Microns vs. Steel Authority of
20 Microns vs. Embassy Office Parks
20 Microns vs. Indian Metals Ferro
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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.

Other Complementary Tools

CEOs Directory
Screen CEOs from public companies around the world
Money Flow Index
Determine momentum by analyzing Money Flow Index and other technical indicators
Correlation Analysis
Reduce portfolio risk simply by holding instruments which are not perfectly correlated
FinTech Suite
Use AI to screen and filter profitable investment opportunities
Funds Screener
Find actively-traded funds from around the world traded on over 30 global exchanges


 
Macroaxis helps investors of all levels and skills to maximize the upside of all their holdings and minimize the risk associated with market volatility, economic swings, and company-specific events. View terms and conditions
 
Feedback Blog
Made with optimal in San Francisco
2024 Macroaxis LLC
COMMON DESTINATIONS
MAIN CATEGORIES
COMPANY