Correlation Between SAL Steel and Malu Paper
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By analyzing existing cross correlation between SAL Steel Limited and Malu Paper Mills, you can compare the effects of market volatilities on SAL Steel and Malu Paper 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 Malu Paper. Check out your portfolio center. Please also check ongoing floating volatility patterns of SAL Steel and Malu Paper.
Diversification Opportunities for SAL Steel and Malu Paper
0.55 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between SAL and Malu is 0.55. Overlapping area represents the amount of risk that can be diversified away by holding SAL Steel Limited and Malu Paper Mills in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Malu Paper Mills 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 Malu Paper. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Malu Paper Mills has no effect on the direction of SAL Steel i.e., SAL Steel and Malu Paper go up and down completely randomly.
Pair Corralation between SAL Steel and Malu Paper
Assuming the 90 days trading horizon SAL Steel Limited is expected to generate 1.53 times more return on investment than Malu Paper. However, SAL Steel is 1.53 times more volatile than Malu Paper Mills. It trades about -0.02 of its potential returns per unit of risk. Malu Paper Mills is currently generating about -0.1 per unit of risk. If you would invest 2,332 in SAL Steel Limited on October 25, 2024 and sell it today you would lose (83.00) from holding SAL Steel Limited or give up 3.56% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
SAL Steel Limited vs. Malu Paper Mills
Performance |
| Timeline |
| SAL Steel Limited |
| Malu Paper Mills |
SAL Steel and Malu Paper Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SAL Steel and Malu Paper
The main advantage of trading using opposite SAL Steel and Malu Paper positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SAL Steel position performs unexpectedly, Malu Paper 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 Malu Paper will offset losses from the drop in Malu Paper's long position.| SAL Steel vs. NMDC Limited | SAL Steel vs. Steel Authority of | SAL Steel vs. Embassy Office Parks | SAL Steel vs. Jai Balaji Industries |
| Malu Paper vs. Tata Steel Limited | Malu Paper vs. Tips Music Limited | Malu Paper vs. SAL Steel Limited | Malu Paper vs. Vibhor Steel Tubes |
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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
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