Correlation Between Speciality Restaurants and Hisar Metal
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By analyzing existing cross correlation between Speciality Restaurants Limited and Hisar Metal Industries, you can compare the effects of market volatilities on Speciality Restaurants and Hisar Metal 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 Speciality Restaurants with a short position of Hisar Metal. Check out your portfolio center. Please also check ongoing floating volatility patterns of Speciality Restaurants and Hisar Metal.
Diversification Opportunities for Speciality Restaurants and Hisar Metal
0.71 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Speciality and Hisar is 0.71. Overlapping area represents the amount of risk that can be diversified away by holding Speciality Restaurants Limited and Hisar Metal Industries in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hisar Metal Industries and Speciality Restaurants 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 Speciality Restaurants Limited are associated (or correlated) with Hisar Metal. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hisar Metal Industries has no effect on the direction of Speciality Restaurants i.e., Speciality Restaurants and Hisar Metal go up and down completely randomly.
Pair Corralation between Speciality Restaurants and Hisar Metal
Assuming the 90 days trading horizon Speciality Restaurants Limited is expected to under-perform the Hisar Metal. In addition to that, Speciality Restaurants is 1.06 times more volatile than Hisar Metal Industries. It trades about -0.16 of its total potential returns per unit of risk. Hisar Metal Industries is currently generating about -0.09 per unit of volatility. If you would invest 18,005 in Hisar Metal Industries on September 3, 2024 and sell it today you would lose (759.00) from holding Hisar Metal Industries or give up 4.22% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Speciality Restaurants Limited vs. Hisar Metal Industries
Performance |
| Timeline |
| Speciality Restaurants |
| Hisar Metal Industries |
Speciality Restaurants and Hisar Metal Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Speciality Restaurants and Hisar Metal
The main advantage of trading using opposite Speciality Restaurants and Hisar Metal positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Speciality Restaurants position performs unexpectedly, Hisar Metal 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 Hisar Metal will offset losses from the drop in Hisar Metal's long position.The idea behind Speciality Restaurants Limited and Hisar Metal Industries pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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