Correlation Between Sonata Software and Praxis Home
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By analyzing existing cross correlation between Sonata Software Limited and Praxis Home Retail, you can compare the effects of market volatilities on Sonata Software and Praxis Home 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 Praxis Home. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sonata Software and Praxis Home.
Diversification Opportunities for Sonata Software and Praxis Home
-0.3 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Sonata and Praxis is -0.3. Overlapping area represents the amount of risk that can be diversified away by holding Sonata Software Limited and Praxis Home Retail in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Praxis Home Retail 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 Praxis Home. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Praxis Home Retail has no effect on the direction of Sonata Software i.e., Sonata Software and Praxis Home go up and down completely randomly.
Pair Corralation between Sonata Software and Praxis Home
Assuming the 90 days trading horizon Sonata Software Limited is expected to generate 0.83 times more return on investment than Praxis Home. However, Sonata Software Limited is 1.2 times less risky than Praxis Home. It trades about 0.25 of its potential returns per unit of risk. Praxis Home Retail is currently generating about -0.2 per unit of risk. If you would invest 59,100 in Sonata Software Limited on September 12, 2024 and sell it today you would earn a total of 7,990 from holding Sonata Software Limited or generate 13.52% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 90.91% |
| Values | Daily Returns |
Sonata Software Limited vs. Praxis Home Retail
Performance |
| Timeline |
| Sonata Software |
| Praxis Home Retail |
Sonata Software and Praxis Home Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sonata Software and Praxis Home
The main advantage of trading using opposite Sonata Software and Praxis Home positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sonata Software position performs unexpectedly, Praxis Home 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 Praxis Home will offset losses from the drop in Praxis Home's long position.| Sonata Software vs. Reliance Industries Limited | Sonata Software vs. Oil Natural Gas | Sonata Software vs. Indian Oil | Sonata Software vs. HDFC Bank Limited |
| Praxis Home vs. Hemisphere Properties India | Praxis Home vs. Indo Borax Chemicals | Praxis Home vs. Kingfa Science Technology | Praxis Home vs. Alkali Metals 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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
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