Correlation Between SAL Steel and Kohinoor Foods
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By analyzing existing cross correlation between SAL Steel Limited and Kohinoor Foods Limited, you can compare the effects of market volatilities on SAL Steel and Kohinoor Foods 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 Kohinoor Foods. Check out your portfolio center. Please also check ongoing floating volatility patterns of SAL Steel and Kohinoor Foods.
Diversification Opportunities for SAL Steel and Kohinoor Foods
0.38 | Correlation Coefficient |
Weak diversification
The 3 months correlation between SAL and Kohinoor is 0.38. Overlapping area represents the amount of risk that can be diversified away by holding SAL Steel Limited and Kohinoor Foods Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kohinoor Foods 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 Kohinoor Foods. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kohinoor Foods has no effect on the direction of SAL Steel i.e., SAL Steel and Kohinoor Foods go up and down completely randomly.
Pair Corralation between SAL Steel and Kohinoor Foods
Assuming the 90 days trading horizon SAL Steel Limited is expected to under-perform the Kohinoor Foods. But the stock apears to be less risky and, when comparing its historical volatility, SAL Steel Limited is 1.17 times less risky than Kohinoor Foods. The stock trades about -0.03 of its potential returns per unit of risk. The Kohinoor Foods Limited is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest 4,185 in Kohinoor Foods Limited on November 8, 2024 and sell it today you would lose (317.00) from holding Kohinoor Foods Limited or give up 7.57% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
SAL Steel Limited vs. Kohinoor Foods Limited
Performance |
| Timeline |
| SAL Steel Limited |
| Kohinoor Foods |
SAL Steel and Kohinoor Foods Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SAL Steel and Kohinoor Foods
The main advantage of trading using opposite SAL Steel and Kohinoor Foods positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SAL Steel position performs unexpectedly, Kohinoor Foods 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 Kohinoor Foods will offset losses from the drop in Kohinoor Foods' long position.| SAL Steel vs. Hathway Cable Datacom | SAL Steel vs. Lemon Tree Hotels | SAL Steel vs. Ravi Kumar Distilleries | SAL Steel vs. Advani Hotels Resorts |
| Kohinoor Foods vs. Reliance Industries Limited | Kohinoor Foods vs. Tata Motors Limited | Kohinoor Foods vs. Oil Natural Gas | Kohinoor Foods vs. HCL Technologies Limited |
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