Correlation Between Sonata Software and ITI
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By analyzing existing cross correlation between Sonata Software Limited and ITI Limited, you can compare the effects of market volatilities on Sonata Software and ITI 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 ITI. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sonata Software and ITI.
Diversification Opportunities for Sonata Software and ITI
0.19 | Correlation Coefficient |
Average diversification
The 3 months correlation between Sonata and ITI is 0.19. Overlapping area represents the amount of risk that can be diversified away by holding Sonata Software Limited and ITI Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ITI Limited 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 ITI. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ITI Limited has no effect on the direction of Sonata Software i.e., Sonata Software and ITI go up and down completely randomly.
Pair Corralation between Sonata Software and ITI
Assuming the 90 days trading horizon Sonata Software is expected to generate 3.88 times less return on investment than ITI. But when comparing it to its historical volatility, Sonata Software Limited is 2.81 times less risky than ITI. It trades about 0.09 of its potential returns per unit of risk. ITI Limited is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest 27,884 in ITI Limited on October 26, 2024 and sell it today you would earn a total of 8,326 from holding ITI Limited or generate 29.86% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sonata Software Limited vs. ITI Limited
Performance |
| Timeline |
| Sonata Software |
| ITI Limited |
Sonata Software and ITI Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sonata Software and ITI
The main advantage of trading using opposite Sonata Software and ITI positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sonata Software position performs unexpectedly, ITI 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 ITI will offset losses from the drop in ITI's long position.| Sonata Software vs. MRF Limited | Sonata Software vs. Maharashtra Scooters Limited | Sonata Software vs. Kingfa Science Technology | Sonata Software vs. Rico Auto Industries |
| ITI vs. Newgen Software Technologies | ITI vs. Bigbloc Construction Limited | ITI vs. Garuda Construction Engineering | ITI vs. Sonata Software 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 Equity Valuation module to check real value of public entities based on technical and fundamental data.
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