Correlation Between Silgo Retail and Power Finance
Can any of the company-specific risk be diversified away by investing in both Silgo Retail and Power Finance 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 Silgo Retail and Power Finance into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Silgo Retail Limited and Power Finance, you can compare the effects of market volatilities on Silgo Retail 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 Silgo Retail with a short position of Power Finance. Check out your portfolio center. Please also check ongoing floating volatility patterns of Silgo Retail and Power Finance.
Diversification Opportunities for Silgo Retail and Power Finance
-0.65 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Silgo and Power is -0.65. Overlapping area represents the amount of risk that can be diversified away by holding Silgo Retail Limited and Power Finance in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Power Finance and Silgo Retail 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 Silgo Retail 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 Silgo Retail i.e., Silgo Retail and Power Finance go up and down completely randomly.
Pair Corralation between Silgo Retail and Power Finance
Assuming the 90 days trading horizon Silgo Retail Limited is expected to under-perform the Power Finance. But the stock apears to be less risky and, when comparing its historical volatility, Silgo Retail Limited is 1.07 times less risky than Power Finance. The stock trades about -0.16 of its potential returns per unit of risk. The Power Finance is currently generating about 0.16 of returns per unit of risk over similar time horizon. If you would invest 43,810 in Power Finance on August 26, 2024 and sell it today you would earn a total of 3,985 from holding Power Finance or generate 9.1% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 95.24% |
| Values | Daily Returns |
Silgo Retail Limited vs. Power Finance
Performance |
| Timeline |
| Silgo Retail Limited |
| Power Finance |
Silgo Retail and Power Finance Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Silgo Retail and Power Finance
The main advantage of trading using opposite Silgo Retail and Power Finance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Silgo Retail 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.| Silgo Retail vs. Reliance Industries Limited | Silgo Retail vs. HDFC Bank Limited | Silgo Retail vs. Bharti Airtel Limited | Silgo Retail vs. Power Finance |
| Power Finance vs. Viceroy Hotels Limited | Power Finance vs. Blue Jet Healthcare | Power Finance vs. TTK Healthcare Limited | Power Finance vs. Allied Blenders Distillers |
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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
Other Complementary Tools
| Portfolio Volatility Check portfolio volatility and analyze historical return density to properly model market risk | |
| Portfolio Dashboard Portfolio dashboard that provides centralized access to all your investments | |
| Companies Directory Evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals | |
| ETFs Find actively traded Exchange Traded Funds (ETF) from around the world | |
| Stocks Directory Find actively traded stocks across global markets |