Correlation Between Salzer Electronics and POWERGRID Infrastructure
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By analyzing existing cross correlation between Salzer Electronics Limited and POWERGRID Infrastructure Investment, you can compare the effects of market volatilities on Salzer Electronics and POWERGRID Infrastructure 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 POWERGRID Infrastructure. Check out your portfolio center. Please also check ongoing floating volatility patterns of Salzer Electronics and POWERGRID Infrastructure.
Diversification Opportunities for Salzer Electronics and POWERGRID Infrastructure
0.23 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Salzer and POWERGRID is 0.23. Overlapping area represents the amount of risk that can be diversified away by holding Salzer Electronics Limited and POWERGRID Infrastructure Inves in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on POWERGRID Infrastructure 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 POWERGRID Infrastructure. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of POWERGRID Infrastructure has no effect on the direction of Salzer Electronics i.e., Salzer Electronics and POWERGRID Infrastructure go up and down completely randomly.
Pair Corralation between Salzer Electronics and POWERGRID Infrastructure
Assuming the 90 days trading horizon Salzer Electronics Limited is expected to generate 3.23 times more return on investment than POWERGRID Infrastructure. However, Salzer Electronics is 3.23 times more volatile than POWERGRID Infrastructure Investment. It trades about 0.09 of its potential returns per unit of risk. POWERGRID Infrastructure Investment is currently generating about -0.14 per unit of risk. If you would invest 96,565 in Salzer Electronics Limited on August 26, 2024 and sell it today you would earn a total of 4,600 from holding Salzer Electronics Limited or generate 4.76% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 95.24% |
| Values | Daily Returns |
Salzer Electronics Limited vs. POWERGRID Infrastructure Inves
Performance |
| Timeline |
| Salzer Electronics |
| POWERGRID Infrastructure |
Salzer Electronics and POWERGRID Infrastructure Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Salzer Electronics and POWERGRID Infrastructure
The main advantage of trading using opposite Salzer Electronics and POWERGRID Infrastructure positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Salzer Electronics position performs unexpectedly, POWERGRID Infrastructure 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 POWERGRID Infrastructure will offset losses from the drop in POWERGRID Infrastructure's long position.| Salzer Electronics vs. Newgen Software Technologies | Salzer Electronics vs. Osia Hyper Retail | Salzer Electronics vs. AVALON TECHNOLOGIES LTD | Salzer Electronics vs. V Mart Retail 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 Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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