Correlation Between SAL Steel and Sapphire Foods
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By analyzing existing cross correlation between SAL Steel Limited and Sapphire Foods India, you can compare the effects of market volatilities on SAL Steel and Sapphire 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 Sapphire Foods. Check out your portfolio center. Please also check ongoing floating volatility patterns of SAL Steel and Sapphire Foods.
Diversification Opportunities for SAL Steel and Sapphire Foods
0.7 | Correlation Coefficient |
Poor diversification
The 3 months correlation between SAL and Sapphire is 0.7. Overlapping area represents the amount of risk that can be diversified away by holding SAL Steel Limited and Sapphire Foods India in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sapphire Foods India 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 Sapphire Foods. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sapphire Foods India has no effect on the direction of SAL Steel i.e., SAL Steel and Sapphire Foods go up and down completely randomly.
Pair Corralation between SAL Steel and Sapphire Foods
Assuming the 90 days trading horizon SAL Steel Limited is expected to under-perform the Sapphire Foods. In addition to that, SAL Steel is 1.17 times more volatile than Sapphire Foods India. It trades about -0.04 of its total potential returns per unit of risk. Sapphire Foods India is currently generating about 0.03 per unit of volatility. If you would invest 30,630 in Sapphire Foods India on September 20, 2024 and sell it today you would earn a total of 320.00 from holding Sapphire Foods India or generate 1.04% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
SAL Steel Limited vs. Sapphire Foods India
Performance |
| Timeline |
| SAL Steel Limited |
| Sapphire Foods India |
SAL Steel and Sapphire Foods Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SAL Steel and Sapphire Foods
The main advantage of trading using opposite SAL Steel and Sapphire Foods positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SAL Steel position performs unexpectedly, Sapphire 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 Sapphire Foods will offset losses from the drop in Sapphire Foods' long position.| SAL Steel vs. Embassy Office Parks | SAL Steel vs. Gujarat Narmada Valley | SAL Steel vs. Gujarat Alkalies and | SAL Steel vs. Indian Metals Ferro |
| Sapphire Foods vs. Future Retail Limited | Sapphire Foods vs. Mahamaya Steel Industries | Sapphire Foods vs. SAL Steel Limited | Sapphire Foods vs. Zenith Steel Pipes |
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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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