Correlation Between Spencers Retail and Malu Paper
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By analyzing existing cross correlation between Spencers Retail Limited and Malu Paper Mills, you can compare the effects of market volatilities on Spencers Retail and Malu Paper 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 Malu Paper. Check out your portfolio center. Please also check ongoing floating volatility patterns of Spencers Retail and Malu Paper.
Diversification Opportunities for Spencers Retail and Malu Paper
0.69 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Spencers and Malu is 0.69. Overlapping area represents the amount of risk that can be diversified away by holding Spencers Retail Limited and Malu Paper Mills in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Malu Paper Mills 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 Malu Paper. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Malu Paper Mills has no effect on the direction of Spencers Retail i.e., Spencers Retail and Malu Paper go up and down completely randomly.
Pair Corralation between Spencers Retail and Malu Paper
Assuming the 90 days trading horizon Spencers Retail is expected to generate 1.36 times less return on investment than Malu Paper. But when comparing it to its historical volatility, Spencers Retail Limited is 1.12 times less risky than Malu Paper. It trades about 0.03 of its potential returns per unit of risk. Malu Paper Mills is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 3,265 in Malu Paper Mills on September 3, 2024 and sell it today you would earn a total of 1,243 from holding Malu Paper Mills or generate 38.07% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 99.59% |
| Values | Daily Returns |
Spencers Retail Limited vs. Malu Paper Mills
Performance |
| Timeline |
| Spencers Retail |
| Malu Paper Mills |
Spencers Retail and Malu Paper Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Spencers Retail and Malu Paper
The main advantage of trading using opposite Spencers Retail and Malu Paper positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Spencers Retail position performs unexpectedly, Malu Paper 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 Malu Paper will offset losses from the drop in Malu Paper's long position.| Spencers Retail vs. Bajaj Holdings Investment | Spencers Retail vs. Shipping | Spencers Retail vs. Indo Borax Chemicals | Spencers Retail vs. Kingfa Science Technology |
| Malu Paper vs. Jindal Steel Power | Malu Paper vs. Spencers Retail Limited | Malu Paper vs. Rama Steel Tubes | Malu Paper vs. Praxis Home Retail |
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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
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