Correlation Between SAL Steel and Blue Coast
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By analyzing existing cross correlation between SAL Steel Limited and Blue Coast Hotels, you can compare the effects of market volatilities on SAL Steel and Blue Coast 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 Blue Coast. Check out your portfolio center. Please also check ongoing floating volatility patterns of SAL Steel and Blue Coast.
Diversification Opportunities for SAL Steel and Blue Coast
0.6 | Correlation Coefficient |
Poor diversification
The 3 months correlation between SAL and Blue is 0.6. Overlapping area represents the amount of risk that can be diversified away by holding SAL Steel Limited and Blue Coast Hotels in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Blue Coast Hotels 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 Blue Coast. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Blue Coast Hotels has no effect on the direction of SAL Steel i.e., SAL Steel and Blue Coast go up and down completely randomly.
Pair Corralation between SAL Steel and Blue Coast
Assuming the 90 days trading horizon SAL Steel Limited is expected to generate 1.73 times more return on investment than Blue Coast. However, SAL Steel is 1.73 times more volatile than Blue Coast Hotels. It trades about 0.05 of its potential returns per unit of risk. Blue Coast Hotels is currently generating about 0.06 per unit of risk. If you would invest 1,355 in SAL Steel Limited on August 26, 2024 and sell it today you would earn a total of 1,049 from holding SAL Steel Limited or generate 77.42% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 80.41% |
| Values | Daily Returns |
SAL Steel Limited vs. Blue Coast Hotels
Performance |
| Timeline |
| SAL Steel Limited |
| Blue Coast Hotels |
SAL Steel and Blue Coast Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SAL Steel and Blue Coast
The main advantage of trading using opposite SAL Steel and Blue Coast positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SAL Steel position performs unexpectedly, Blue Coast 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 Blue Coast will offset losses from the drop in Blue Coast's long position.| SAL Steel vs. Electronics Mart India | SAL Steel vs. Dhampur Bio Organics | SAL Steel vs. Sanginita Chemicals Limited | SAL Steel vs. Fine Organic Industries |
| Blue Coast vs. MMTC Limited | Blue Coast vs. Kingfa Science Technology | Blue Coast vs. Rico Auto Industries | Blue Coast vs. GACM Technologies 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 Money Managers module to screen money managers from public funds and ETFs managed around the world.
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