Correlation Between SAL Steel and Tamilnad Mercantile
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By analyzing existing cross correlation between SAL Steel Limited and Tamilnad Mercantile Bank, you can compare the effects of market volatilities on SAL Steel and Tamilnad Mercantile 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 Tamilnad Mercantile. Check out your portfolio center. Please also check ongoing floating volatility patterns of SAL Steel and Tamilnad Mercantile.
Diversification Opportunities for SAL Steel and Tamilnad Mercantile
0.16 | Correlation Coefficient |
Average diversification
The 3 months correlation between SAL and Tamilnad is 0.16. Overlapping area represents the amount of risk that can be diversified away by holding SAL Steel Limited and Tamilnad Mercantile Bank in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tamilnad Mercantile Bank 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 Tamilnad Mercantile. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tamilnad Mercantile Bank has no effect on the direction of SAL Steel i.e., SAL Steel and Tamilnad Mercantile go up and down completely randomly.
Pair Corralation between SAL Steel and Tamilnad Mercantile
Assuming the 90 days trading horizon SAL Steel Limited is expected to generate 4.18 times more return on investment than Tamilnad Mercantile. However, SAL Steel is 4.18 times more volatile than Tamilnad Mercantile Bank. It trades about -0.01 of its potential returns per unit of risk. Tamilnad Mercantile Bank is currently generating about -0.17 per unit of risk. If you would invest 2,299 in SAL Steel Limited on October 26, 2024 and sell it today you would lose (50.00) from holding SAL Steel Limited or give up 2.17% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
SAL Steel Limited vs. Tamilnad Mercantile Bank
Performance |
| Timeline |
| SAL Steel Limited |
| Tamilnad Mercantile Bank |
SAL Steel and Tamilnad Mercantile Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SAL Steel and Tamilnad Mercantile
The main advantage of trading using opposite SAL Steel and Tamilnad Mercantile positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SAL Steel position performs unexpectedly, Tamilnad Mercantile 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 Tamilnad Mercantile will offset losses from the drop in Tamilnad Mercantile's long position.| SAL Steel vs. Paramount Communications Limited | SAL Steel vs. Jindal Drilling And | SAL Steel vs. Can Fin Homes | SAL Steel vs. Embassy Office Parks |
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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
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