Correlation Between Selan Exploration and Cambridge Technology
Can any of the company-specific risk be diversified away by investing in both Selan Exploration and Cambridge Technology at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Selan Exploration and Cambridge Technology into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Selan Exploration Technology and Cambridge Technology Enterprises, you can compare the effects of market volatilities on Selan Exploration and Cambridge Technology 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 Selan Exploration with a short position of Cambridge Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Selan Exploration and Cambridge Technology.
Diversification Opportunities for Selan Exploration and Cambridge Technology
0.84 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Selan and Cambridge is 0.84. Overlapping area represents the amount of risk that can be diversified away by holding Selan Exploration Technology and Cambridge Technology Enterpris in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cambridge Technology and Selan Exploration 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 Selan Exploration Technology are associated (or correlated) with Cambridge Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cambridge Technology has no effect on the direction of Selan Exploration i.e., Selan Exploration and Cambridge Technology go up and down completely randomly.
Pair Corralation between Selan Exploration and Cambridge Technology
Assuming the 90 days trading horizon Selan Exploration Technology is expected to generate 0.93 times more return on investment than Cambridge Technology. However, Selan Exploration Technology is 1.07 times less risky than Cambridge Technology. It trades about 0.05 of its potential returns per unit of risk. Cambridge Technology Enterprises is currently generating about 0.03 per unit of risk. If you would invest 28,295 in Selan Exploration Technology on November 27, 2024 and sell it today you would earn a total of 25,000 from holding Selan Exploration Technology or generate 88.35% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 99.79% |
| Values | Daily Returns |
Selan Exploration Technology vs. Cambridge Technology Enterpris
Performance |
| Timeline |
| Selan Exploration |
| Cambridge Technology |
Selan Exploration and Cambridge Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Selan Exploration and Cambridge Technology
The main advantage of trading using opposite Selan Exploration and Cambridge Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Selan Exploration position performs unexpectedly, Cambridge Technology 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 Cambridge Technology will offset losses from the drop in Cambridge Technology's long position.| Selan Exploration vs. Dharani SugarsChemicals Limited | Selan Exploration vs. VA Tech Wabag | Selan Exploration vs. TECIL Chemicals and | Selan Exploration vs. FCS Software Solutions |
| Cambridge Technology vs. State Bank of | Cambridge Technology vs. Reliance Industries Limited | Cambridge Technology vs. HDFC Bank Limited | Cambridge Technology vs. Tata Motors 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 Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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