Correlation Between Spencers Retail and Marshall Machines
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By analyzing existing cross correlation between Spencers Retail Limited and Marshall Machines Limited, you can compare the effects of market volatilities on Spencers Retail and Marshall Machines 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 Marshall Machines. Check out your portfolio center. Please also check ongoing floating volatility patterns of Spencers Retail and Marshall Machines.
Diversification Opportunities for Spencers Retail and Marshall Machines
0.82 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Spencers and Marshall is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding Spencers Retail Limited and Marshall Machines Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Marshall Machines 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 Marshall Machines. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Marshall Machines has no effect on the direction of Spencers Retail i.e., Spencers Retail and Marshall Machines go up and down completely randomly.
Pair Corralation between Spencers Retail and Marshall Machines
Assuming the 90 days trading horizon Spencers Retail Limited is expected to generate 0.65 times more return on investment than Marshall Machines. However, Spencers Retail Limited is 1.54 times less risky than Marshall Machines. It trades about 0.11 of its potential returns per unit of risk. Marshall Machines Limited is currently generating about -0.01 per unit of risk. If you would invest 8,164 in Spencers Retail Limited on September 19, 2024 and sell it today you would earn a total of 386.00 from holding Spencers Retail Limited or generate 4.73% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Spencers Retail Limited vs. Marshall Machines Limited
Performance |
| Timeline |
| Spencers Retail |
| Marshall Machines |
Spencers Retail and Marshall Machines Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Spencers Retail and Marshall Machines
The main advantage of trading using opposite Spencers Retail and Marshall Machines positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Spencers Retail position performs unexpectedly, Marshall Machines 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 Marshall Machines will offset losses from the drop in Marshall Machines' long position.| Spencers Retail vs. Kingfa Science Technology | Spencers Retail vs. Rico Auto Industries | Spencers Retail vs. GACM Technologies Limited | Spencers Retail vs. COSMO FIRST LIMITED |
| Marshall Machines vs. Popular Vehicles and | Marshall Machines vs. EIH Associated Hotels | Marshall Machines vs. Spencers Retail Limited | Marshall Machines vs. Lemon Tree Hotels |
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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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