Correlation Between SAL Steel and Taj GVK
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By analyzing existing cross correlation between SAL Steel Limited and Taj GVK Hotels, you can compare the effects of market volatilities on SAL Steel and Taj GVK 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 Taj GVK. Check out your portfolio center. Please also check ongoing floating volatility patterns of SAL Steel and Taj GVK.
Diversification Opportunities for SAL Steel and Taj GVK
Very good diversification
The 3 months correlation between SAL and Taj is -0.3. Overlapping area represents the amount of risk that can be diversified away by holding SAL Steel Limited and Taj GVK Hotels in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Taj GVK Hotels 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 Taj GVK. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Taj GVK Hotels has no effect on the direction of SAL Steel i.e., SAL Steel and Taj GVK go up and down completely randomly.
Pair Corralation between SAL Steel and Taj GVK
Assuming the 90 days trading horizon SAL Steel Limited is expected to generate 1.22 times more return on investment than Taj GVK. However, SAL Steel is 1.22 times more volatile than Taj GVK Hotels. It trades about 0.05 of its potential returns per unit of risk. Taj GVK Hotels is currently generating about 0.04 per unit of risk. If you would invest 1,355 in SAL Steel Limited on August 26, 2024 and sell it today you would earn a total of 1,049 from holding SAL Steel Limited or generate 77.42% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.59% |
| Values | Daily Returns |
SAL Steel Limited vs. Taj GVK Hotels
Performance |
| Timeline |
| SAL Steel Limited |
| Taj GVK Hotels |
SAL Steel and Taj GVK Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SAL Steel and Taj GVK
The main advantage of trading using opposite SAL Steel and Taj GVK positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SAL Steel position performs unexpectedly, Taj GVK 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 Taj GVK will offset losses from the drop in Taj GVK's long position.| SAL Steel vs. Electronics Mart India | SAL Steel vs. Dhampur Bio Organics | SAL Steel vs. Sanginita Chemicals Limited | SAL Steel vs. Fine Organic Industries |
| Taj GVK vs. MMTC Limited | Taj GVK vs. Kingfa Science Technology | Taj GVK vs. Rico Auto Industries | Taj GVK vs. GACM Technologies 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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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