Correlation Between SAL Steel and Exide Industries
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By analyzing existing cross correlation between SAL Steel Limited and Exide Industries Limited, you can compare the effects of market volatilities on SAL Steel and Exide Industries 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 Exide Industries. Check out your portfolio center. Please also check ongoing floating volatility patterns of SAL Steel and Exide Industries.
Diversification Opportunities for SAL Steel and Exide Industries
0.26 | Correlation Coefficient |
Modest diversification
The 3 months correlation between SAL and Exide is 0.26. Overlapping area represents the amount of risk that can be diversified away by holding SAL Steel Limited and Exide Industries Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Exide Industries 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 Exide Industries. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Exide Industries has no effect on the direction of SAL Steel i.e., SAL Steel and Exide Industries go up and down completely randomly.
Pair Corralation between SAL Steel and Exide Industries
Assuming the 90 days trading horizon SAL Steel Limited is expected to under-perform the Exide Industries. In addition to that, SAL Steel is 1.77 times more volatile than Exide Industries Limited. It trades about -0.04 of its total potential returns per unit of risk. Exide Industries Limited is currently generating about 0.07 per unit of volatility. If you would invest 44,505 in Exide Industries Limited on September 5, 2024 and sell it today you would earn a total of 1,050 from holding Exide Industries Limited or generate 2.36% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
SAL Steel Limited vs. Exide Industries Limited
Performance |
| Timeline |
| SAL Steel Limited |
| Exide Industries |
SAL Steel and Exide Industries Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SAL Steel and Exide Industries
The main advantage of trading using opposite SAL Steel and Exide Industries positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SAL Steel position performs unexpectedly, Exide Industries 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 Exide Industries will offset losses from the drop in Exide Industries' long position.| SAL Steel vs. NMDC Limited | SAL Steel vs. Steel Authority of | SAL Steel vs. Embassy Office Parks | SAL Steel vs. Gujarat Narmada Valley |
| Exide Industries vs. SAL Steel Limited | Exide Industries vs. Visa Steel Limited | Exide Industries vs. Vardhman Special Steels | Exide Industries vs. Paramount Communications 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 Portfolio Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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