Correlation Between Sonata Software and Fiem Industries
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By analyzing existing cross correlation between Sonata Software Limited and Fiem Industries Limited, you can compare the effects of market volatilities on Sonata Software and Fiem Industries 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 Sonata Software with a short position of Fiem Industries. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sonata Software and Fiem Industries.
Diversification Opportunities for Sonata Software and Fiem Industries
0.61 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Sonata and Fiem is 0.61. Overlapping area represents the amount of risk that can be diversified away by holding Sonata Software Limited and Fiem Industries Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fiem Industries and Sonata Software 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 Sonata Software Limited are associated (or correlated) with Fiem Industries. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fiem Industries has no effect on the direction of Sonata Software i.e., Sonata Software and Fiem Industries go up and down completely randomly.
Pair Corralation between Sonata Software and Fiem Industries
Assuming the 90 days trading horizon Sonata Software Limited is expected to generate 1.44 times more return on investment than Fiem Industries. However, Sonata Software is 1.44 times more volatile than Fiem Industries Limited. It trades about 0.05 of its potential returns per unit of risk. Fiem Industries Limited is currently generating about -0.01 per unit of risk. If you would invest 61,400 in Sonata Software Limited on September 2, 2024 and sell it today you would earn a total of 1,190 from holding Sonata Software Limited or generate 1.94% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.24% |
| Values | Daily Returns |
Sonata Software Limited vs. Fiem Industries Limited
Performance |
| Timeline |
| Sonata Software |
| Fiem Industries |
Sonata Software and Fiem Industries Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sonata Software and Fiem Industries
The main advantage of trading using opposite Sonata Software and Fiem Industries positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sonata Software position performs unexpectedly, Fiem Industries 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 Fiem Industries will offset losses from the drop in Fiem Industries' long position.| Sonata Software vs. Kaushalya Infrastructure Development | Sonata Software vs. Kingfa Science Technology | Sonata Software vs. Rico Auto Industries | Sonata Software vs. GACM Technologies Limited |
| Fiem Industries vs. Sapphire Foods India | Fiem Industries vs. Sonata Software Limited | Fiem Industries vs. WESTLIFE FOODWORLD LIMITED | Fiem Industries vs. Selan Exploration Technology |
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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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