Correlation Between Speciality Restaurants and Refex Industries
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By analyzing existing cross correlation between Speciality Restaurants Limited and Refex Industries Limited, you can compare the effects of market volatilities on Speciality Restaurants and Refex 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 Speciality Restaurants with a short position of Refex Industries. Check out your portfolio center. Please also check ongoing floating volatility patterns of Speciality Restaurants and Refex Industries.
Diversification Opportunities for Speciality Restaurants and Refex Industries
-0.55 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Speciality and Refex is -0.55. Overlapping area represents the amount of risk that can be diversified away by holding Speciality Restaurants Limited and Refex Industries Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Refex 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 Refex Industries. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Refex Industries has no effect on the direction of Speciality Restaurants i.e., Speciality Restaurants and Refex Industries go up and down completely randomly.
Pair Corralation between Speciality Restaurants and Refex Industries
Assuming the 90 days trading horizon Speciality Restaurants Limited is expected to under-perform the Refex Industries. But the stock apears to be less risky and, when comparing its historical volatility, Speciality Restaurants Limited is 1.08 times less risky than Refex Industries. The stock trades about -0.16 of its potential returns per unit of risk. The Refex Industries Limited is currently generating about 0.17 of returns per unit of risk over similar time horizon. If you would invest 47,985 in Refex Industries Limited on September 3, 2024 and sell it today you would earn a total of 3,905 from holding Refex Industries Limited or generate 8.14% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Speciality Restaurants Limited vs. Refex Industries Limited
Performance |
| Timeline |
| Speciality Restaurants |
| Refex Industries |
Speciality Restaurants and Refex Industries Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Speciality Restaurants and Refex Industries
The main advantage of trading using opposite Speciality Restaurants and Refex Industries positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Speciality Restaurants position performs unexpectedly, Refex 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 Refex Industries will offset losses from the drop in Refex Industries' long position.The idea behind Speciality Restaurants Limited and Refex Industries Limited 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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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