Correlation Between Shriram Finance and Power Finance
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By analyzing existing cross correlation between Shriram Finance Limited and Power Finance, you can compare the effects of market volatilities on Shriram Finance and Power Finance 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 Shriram Finance with a short position of Power Finance. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shriram Finance and Power Finance.
Diversification Opportunities for Shriram Finance and Power Finance
0.15 | Correlation Coefficient |
Average diversification
The 3 months correlation between Shriram and Power is 0.15. Overlapping area represents the amount of risk that can be diversified away by holding Shriram Finance Limited and Power Finance in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Power Finance and Shriram Finance 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 Shriram Finance Limited are associated (or correlated) with Power Finance. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Power Finance has no effect on the direction of Shriram Finance i.e., Shriram Finance and Power Finance go up and down completely randomly.
Pair Corralation between Shriram Finance and Power Finance
Assuming the 90 days trading horizon Shriram Finance Limited is expected to under-perform the Power Finance. But the stock apears to be less risky and, when comparing its historical volatility, Shriram Finance Limited is 1.5 times less risky than Power Finance. The stock trades about -0.11 of its potential returns per unit of risk. The Power Finance is currently generating about 0.17 of returns per unit of risk over similar time horizon. If you would invest 45,574 in Power Finance on September 2, 2024 and sell it today you would earn a total of 3,956 from holding Power Finance or generate 8.68% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Shriram Finance Limited vs. Power Finance
Performance |
| Timeline |
| Shriram Finance |
| Power Finance |
Shriram Finance and Power Finance Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shriram Finance and Power Finance
The main advantage of trading using opposite Shriram Finance and Power Finance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shriram Finance position performs unexpectedly, Power Finance 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 Power Finance will offset losses from the drop in Power Finance's long position.| Shriram Finance vs. Fine Organic Industries | Shriram Finance vs. Sarveshwar Foods Limited | Shriram Finance vs. Foods Inns Limited | Shriram Finance vs. Megastar Foods Limited |
| Power Finance vs. State Bank of | Power Finance vs. Life Insurance | Power Finance vs. HDFC Bank Limited | Power Finance 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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
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