Correlation Between SAL Steel and United Drilling
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By analyzing existing cross correlation between SAL Steel Limited and United Drilling Tools, you can compare the effects of market volatilities on SAL Steel and United Drilling 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 United Drilling. Check out your portfolio center. Please also check ongoing floating volatility patterns of SAL Steel and United Drilling.
Diversification Opportunities for SAL Steel and United Drilling
-0.23 | Correlation Coefficient |
Very good diversification
The 3 months correlation between SAL and United is -0.23. Overlapping area represents the amount of risk that can be diversified away by holding SAL Steel Limited and United Drilling Tools in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on United Drilling Tools 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 United Drilling. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of United Drilling Tools has no effect on the direction of SAL Steel i.e., SAL Steel and United Drilling go up and down completely randomly.
Pair Corralation between SAL Steel and United Drilling
Assuming the 90 days trading horizon SAL Steel Limited is expected to generate 1.29 times more return on investment than United Drilling. However, SAL Steel is 1.29 times more volatile than United Drilling Tools. It trades about 0.08 of its potential returns per unit of risk. United Drilling Tools is currently generating about 0.08 per unit of risk. If you would invest 1,890 in SAL Steel Limited on September 2, 2024 and sell it today you would earn a total of 538.00 from holding SAL Steel Limited or generate 28.47% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
SAL Steel Limited vs. United Drilling Tools
Performance |
| Timeline |
| SAL Steel Limited |
| United Drilling Tools |
SAL Steel and United Drilling Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SAL Steel and United Drilling
The main advantage of trading using opposite SAL Steel and United Drilling positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SAL Steel position performs unexpectedly, United Drilling 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 United Drilling will offset losses from the drop in United Drilling's long position.| SAL Steel vs. One 97 Communications | SAL Steel vs. Tata Communications Limited | SAL Steel vs. Ratnamani Metals Tubes | SAL Steel vs. Indian Metals Ferro |
| United Drilling vs. Sarveshwar Foods Limited | United Drilling vs. Jubilant Foodworks Limited | United Drilling vs. LT Foods Limited | United Drilling vs. Gujarat Fluorochemicals 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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
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