Correlation Between Servotech Power and General Insurance
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By analyzing existing cross correlation between Servotech Power Systems and General Insurance, you can compare the effects of market volatilities on Servotech Power and General Insurance 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 Servotech Power with a short position of General Insurance. Check out your portfolio center. Please also check ongoing floating volatility patterns of Servotech Power and General Insurance.
Diversification Opportunities for Servotech Power and General Insurance
-0.08 | Correlation Coefficient |
Good diversification
The 3 months correlation between Servotech and General is -0.08. Overlapping area represents the amount of risk that can be diversified away by holding Servotech Power Systems and General Insurance in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on General Insurance and Servotech Power 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 Servotech Power Systems are associated (or correlated) with General Insurance. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of General Insurance has no effect on the direction of Servotech Power i.e., Servotech Power and General Insurance go up and down completely randomly.
Pair Corralation between Servotech Power and General Insurance
Assuming the 90 days trading horizon Servotech Power Systems is expected to generate 1.3 times more return on investment than General Insurance. However, Servotech Power is 1.3 times more volatile than General Insurance. It trades about 0.11 of its potential returns per unit of risk. General Insurance is currently generating about 0.07 per unit of risk. If you would invest 3,185 in Servotech Power Systems on September 3, 2024 and sell it today you would earn a total of 14,716 from holding Servotech Power Systems or generate 462.04% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.79% |
| Values | Daily Returns |
Servotech Power Systems vs. General Insurance
Performance |
| Timeline |
| Servotech Power Systems |
| General Insurance |
Servotech Power and General Insurance Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Servotech Power and General Insurance
The main advantage of trading using opposite Servotech Power and General Insurance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Servotech Power position performs unexpectedly, General Insurance 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 General Insurance will offset losses from the drop in General Insurance's long position.| Servotech Power vs. Tata Consultancy Services | Servotech Power vs. Reliance Industries Limited | Servotech Power vs. Wipro Limited | Servotech Power vs. Shipping |
| General Insurance vs. Tata Communications Limited | General Insurance vs. Kalyani Steels Limited | General Insurance vs. KNR Constructions Limited | General Insurance vs. Bigbloc Construction 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 Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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