Correlation Between Speciality Restaurants and Spencers Retail
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By analyzing existing cross correlation between Speciality Restaurants Limited and Spencers Retail Limited, you can compare the effects of market volatilities on Speciality Restaurants and Spencers Retail 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 Spencers Retail. Check out your portfolio center. Please also check ongoing floating volatility patterns of Speciality Restaurants and Spencers Retail.
Diversification Opportunities for Speciality Restaurants and Spencers Retail
0.6 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Speciality and Spencers is 0.6. Overlapping area represents the amount of risk that can be diversified away by holding Speciality Restaurants Limited and Spencers Retail Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Spencers Retail 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 Spencers Retail. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Spencers Retail has no effect on the direction of Speciality Restaurants i.e., Speciality Restaurants and Spencers Retail go up and down completely randomly.
Pair Corralation between Speciality Restaurants and Spencers Retail
Assuming the 90 days trading horizon Speciality Restaurants Limited is expected to under-perform the Spencers Retail. But the stock apears to be less risky and, when comparing its historical volatility, Speciality Restaurants Limited is 1.38 times less risky than Spencers Retail. The stock trades about -0.1 of its potential returns per unit of risk. The Spencers Retail Limited is currently generating about -0.04 of returns per unit of risk over similar time horizon. If you would invest 12,415 in Spencers Retail Limited on November 3, 2024 and sell it today you would lose (4,402) from holding Spencers Retail Limited or give up 35.46% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 99.59% |
| Values | Daily Returns |
Speciality Restaurants Limited vs. Spencers Retail Limited
Performance |
| Timeline |
| Speciality Restaurants |
| Spencers Retail |
Speciality Restaurants and Spencers Retail Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Speciality Restaurants and Spencers Retail
The main advantage of trading using opposite Speciality Restaurants and Spencers Retail positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Speciality Restaurants position performs unexpectedly, Spencers Retail 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 Spencers Retail will offset losses from the drop in Spencers Retail's long position.| Speciality Restaurants vs. Hindware Home Innovation | Speciality Restaurants vs. OnMobile Global Limited | Speciality Restaurants vs. Embassy Office Parks | Speciality Restaurants vs. Welspun Investments and |
| Spencers Retail vs. Speciality Restaurants Limited | Spencers Retail vs. Lotus Eye Hospital | Spencers Retail vs. PB Fintech Limited | Spencers Retail vs. Medplus Health Services |
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