Correlation Between SAL Steel and Spencers Retail
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By analyzing existing cross correlation between SAL Steel Limited and Spencers Retail Limited, you can compare the effects of market volatilities on SAL Steel and Spencers Retail 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 Spencers Retail. Check out your portfolio center. Please also check ongoing floating volatility patterns of SAL Steel and Spencers Retail.
Diversification Opportunities for SAL Steel and Spencers Retail
0.67 | Correlation Coefficient |
Poor diversification
The 3 months correlation between SAL and Spencers is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding SAL Steel Limited and Spencers Retail Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Spencers Retail 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 Spencers Retail. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Spencers Retail has no effect on the direction of SAL Steel i.e., SAL Steel and Spencers Retail go up and down completely randomly.
Pair Corralation between SAL Steel and Spencers Retail
Assuming the 90 days trading horizon SAL Steel Limited is expected to generate 1.81 times more return on investment than Spencers Retail. However, SAL Steel is 1.81 times more volatile than Spencers Retail Limited. It trades about -0.03 of its potential returns per unit of risk. Spencers Retail Limited is currently generating about -0.18 per unit of risk. If you would invest 2,036 in SAL Steel Limited on November 28, 2024 and sell it today you would lose (130.00) from holding SAL Steel Limited or give up 6.39% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
SAL Steel Limited vs. Spencers Retail Limited
Performance |
| Timeline |
| SAL Steel Limited |
| Spencers Retail |
SAL Steel and Spencers Retail Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SAL Steel and Spencers Retail
The main advantage of trading using opposite SAL Steel and Spencers Retail positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SAL Steel position performs unexpectedly, Spencers Retail 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 Spencers Retail will offset losses from the drop in Spencers Retail's long position.| SAL Steel vs. SBI Life Insurance | SAL Steel vs. Uniinfo Telecom Services | SAL Steel vs. Reliance Communications Limited | SAL Steel vs. Paramount Communications Limited |
| Spencers Retail vs. Hexaware Technologies Limited | Spencers Retail vs. Network18 Media Investments | Spencers Retail vs. Goldstone Technologies Limited | Spencers Retail vs. Welspun Investments and |
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 Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
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