Correlation Between Southern Petrochemicals and Future Supply
Can any of the company-specific risk be diversified away by investing in both Southern Petrochemicals and Future Supply at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Southern Petrochemicals and Future Supply into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Southern Petrochemicals Industries and Future Supply Chain, you can compare the effects of market volatilities on Southern Petrochemicals and Future Supply 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 Southern Petrochemicals with a short position of Future Supply. Check out your portfolio center. Please also check ongoing floating volatility patterns of Southern Petrochemicals and Future Supply.
Diversification Opportunities for Southern Petrochemicals and Future Supply
-0.21 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Southern and Future is -0.21. Overlapping area represents the amount of risk that can be diversified away by holding Southern Petrochemicals Indust and Future Supply Chain in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Future Supply Chain and Southern Petrochemicals 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 Southern Petrochemicals Industries are associated (or correlated) with Future Supply. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Future Supply Chain has no effect on the direction of Southern Petrochemicals i.e., Southern Petrochemicals and Future Supply go up and down completely randomly.
Pair Corralation between Southern Petrochemicals and Future Supply
Assuming the 90 days trading horizon Southern Petrochemicals is expected to generate 3.08 times less return on investment than Future Supply. But when comparing it to its historical volatility, Southern Petrochemicals Industries is 1.27 times less risky than Future Supply. It trades about 0.11 of its potential returns per unit of risk. Future Supply Chain is currently generating about 0.28 of returns per unit of risk over similar time horizon. If you would invest 189.00 in Future Supply Chain on October 29, 2024 and sell it today you would earn a total of 35.00 from holding Future Supply Chain or generate 18.52% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.0% |
| Values | Daily Returns |
Southern Petrochemicals Indust vs. Future Supply Chain
Performance |
| Timeline |
| Southern Petrochemicals |
| Future Supply Chain |
Southern Petrochemicals and Future Supply Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Southern Petrochemicals and Future Supply
The main advantage of trading using opposite Southern Petrochemicals and Future Supply positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Southern Petrochemicals position performs unexpectedly, Future Supply 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 Future Supply will offset losses from the drop in Future Supply's long position.| Southern Petrochemicals vs. NMDC Limited | Southern Petrochemicals vs. Steel Authority of | Southern Petrochemicals vs. Embassy Office Parks | Southern Petrochemicals vs. Jai Balaji Industries |
| Future Supply vs. Chembond Chemicals | Future Supply vs. Southern Petrochemicals Industries | Future Supply vs. JGCHEMICALS LIMITED | Future Supply vs. Mangalore Chemicals Fertilizers |
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 Portfolio Anywhere module to track or share privately all of your investments from the convenience of any device.
Other Complementary Tools
| Theme Ratings Determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Global Markets Map Get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes | |
| Funds Screener Find actively-traded funds from around the world traded on over 30 global exchanges | |
| Portfolio Diagnostics Use generated alerts and portfolio events aggregator to diagnose current holdings | |
| Bollinger Bands Use Bollinger Bands indicator to analyze target price for a given investing horizon |