Correlation Between Spencers Retail and Kothari Petrochemicals
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By analyzing existing cross correlation between Spencers Retail Limited and Kothari Petrochemicals Limited, you can compare the effects of market volatilities on Spencers Retail and Kothari Petrochemicals 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 Spencers Retail with a short position of Kothari Petrochemicals. Check out your portfolio center. Please also check ongoing floating volatility patterns of Spencers Retail and Kothari Petrochemicals.
Diversification Opportunities for Spencers Retail and Kothari Petrochemicals
0.73 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Spencers and Kothari is 0.73. Overlapping area represents the amount of risk that can be diversified away by holding Spencers Retail Limited and Kothari Petrochemicals Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kothari Petrochemicals and Spencers Retail 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 Spencers Retail Limited are associated (or correlated) with Kothari Petrochemicals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kothari Petrochemicals has no effect on the direction of Spencers Retail i.e., Spencers Retail and Kothari Petrochemicals go up and down completely randomly.
Pair Corralation between Spencers Retail and Kothari Petrochemicals
Assuming the 90 days trading horizon Spencers Retail Limited is expected to generate 1.25 times more return on investment than Kothari Petrochemicals. However, Spencers Retail is 1.25 times more volatile than Kothari Petrochemicals Limited. It trades about -0.02 of its potential returns per unit of risk. Kothari Petrochemicals Limited is currently generating about -0.14 per unit of risk. If you would invest 8,307 in Spencers Retail Limited on November 3, 2024 and sell it today you would lose (294.00) from holding Spencers Retail Limited or give up 3.54% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Spencers Retail Limited vs. Kothari Petrochemicals Limited
Performance |
| Timeline |
| Spencers Retail |
| Kothari Petrochemicals |
Spencers Retail and Kothari Petrochemicals Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Spencers Retail and Kothari Petrochemicals
The main advantage of trading using opposite Spencers Retail and Kothari Petrochemicals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Spencers Retail position performs unexpectedly, Kothari Petrochemicals 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 Kothari Petrochemicals will offset losses from the drop in Kothari Petrochemicals' long position.| Spencers Retail vs. Bharatiya Global Infomedia | Spencers Retail vs. General Insurance | Spencers Retail vs. Music Broadcast Limited | Spencers Retail vs. UFO Moviez India |
| Kothari Petrochemicals vs. Bigbloc Construction Limited | Kothari Petrochemicals vs. Ankit Metal Power | Kothari Petrochemicals vs. Agarwal Industrial | Kothari Petrochemicals vs. Hindustan Construction |
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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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