Correlation Between Sonata Software and Golden Tobacco
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By analyzing existing cross correlation between Sonata Software Limited and Golden Tobacco Limited, you can compare the effects of market volatilities on Sonata Software and Golden Tobacco 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 Golden Tobacco. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sonata Software and Golden Tobacco.
Diversification Opportunities for Sonata Software and Golden Tobacco
0.49 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Sonata and Golden is 0.49. Overlapping area represents the amount of risk that can be diversified away by holding Sonata Software Limited and Golden Tobacco Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Golden Tobacco 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 Golden Tobacco. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Golden Tobacco has no effect on the direction of Sonata Software i.e., Sonata Software and Golden Tobacco go up and down completely randomly.
Pair Corralation between Sonata Software and Golden Tobacco
Assuming the 90 days trading horizon Sonata Software Limited is expected to under-perform the Golden Tobacco. But the stock apears to be less risky and, when comparing its historical volatility, Sonata Software Limited is 2.01 times less risky than Golden Tobacco. The stock trades about -0.34 of its potential returns per unit of risk. The Golden Tobacco Limited is currently generating about -0.09 of returns per unit of risk over similar time horizon. If you would invest 4,198 in Golden Tobacco Limited on October 12, 2024 and sell it today you would lose (258.00) from holding Golden Tobacco Limited or give up 6.15% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sonata Software Limited vs. Golden Tobacco Limited
Performance |
| Timeline |
| Sonata Software |
| Golden Tobacco |
Sonata Software and Golden Tobacco Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sonata Software and Golden Tobacco
The main advantage of trading using opposite Sonata Software and Golden Tobacco positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sonata Software position performs unexpectedly, Golden Tobacco 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 Golden Tobacco will offset losses from the drop in Golden Tobacco's long position.| Sonata Software vs. Manaksia Coated Metals | Sonata Software vs. Transport of | Sonata Software vs. Golden Tobacco Limited | Sonata Software vs. Iris Clothings Limited |
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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.
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