Correlation Between Salzer Electronics and Newgen Software
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By analyzing existing cross correlation between Salzer Electronics Limited and Newgen Software Technologies, you can compare the effects of market volatilities on Salzer Electronics and Newgen Software 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 Salzer Electronics with a short position of Newgen Software. Check out your portfolio center. Please also check ongoing floating volatility patterns of Salzer Electronics and Newgen Software.
Diversification Opportunities for Salzer Electronics and Newgen Software
-0.21 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Salzer and Newgen is -0.21. Overlapping area represents the amount of risk that can be diversified away by holding Salzer Electronics Limited and Newgen Software Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Newgen Software Tech and Salzer Electronics 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 Salzer Electronics Limited are associated (or correlated) with Newgen Software. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Newgen Software Tech has no effect on the direction of Salzer Electronics i.e., Salzer Electronics and Newgen Software go up and down completely randomly.
Pair Corralation between Salzer Electronics and Newgen Software
Assuming the 90 days trading horizon Salzer Electronics is expected to generate 1.49 times less return on investment than Newgen Software. But when comparing it to its historical volatility, Salzer Electronics Limited is 1.76 times less risky than Newgen Software. It trades about 0.11 of its potential returns per unit of risk. Newgen Software Technologies is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 17,396 in Newgen Software Technologies on August 30, 2024 and sell it today you would earn a total of 96,864 from holding Newgen Software Technologies or generate 556.82% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Salzer Electronics Limited vs. Newgen Software Technologies
Performance |
| Timeline |
| Salzer Electronics |
| Newgen Software Tech |
Salzer Electronics and Newgen Software Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Salzer Electronics and Newgen Software
The main advantage of trading using opposite Salzer Electronics and Newgen Software positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Salzer Electronics position performs unexpectedly, Newgen Software 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 Newgen Software will offset losses from the drop in Newgen Software's long position.| Salzer Electronics vs. State Bank of | Salzer Electronics vs. Life Insurance | Salzer Electronics vs. HDFC Bank Limited | Salzer Electronics vs. ICICI Bank 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 CEOs Directory module to screen CEOs from public companies around the world.
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