Correlation Between Southern Petrochemicals and Salzer Electronics
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By analyzing existing cross correlation between Southern Petrochemicals Industries and Salzer Electronics Limited, you can compare the effects of market volatilities on Southern Petrochemicals and Salzer Electronics 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 Salzer Electronics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Southern Petrochemicals and Salzer Electronics.
Diversification Opportunities for Southern Petrochemicals and Salzer Electronics
-0.14 | Correlation Coefficient |
Good diversification
The 3 months correlation between Southern and Salzer is -0.14. Overlapping area represents the amount of risk that can be diversified away by holding Southern Petrochemicals Indust and Salzer Electronics Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Salzer Electronics 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 Salzer Electronics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Salzer Electronics has no effect on the direction of Southern Petrochemicals i.e., Southern Petrochemicals and Salzer Electronics go up and down completely randomly.
Pair Corralation between Southern Petrochemicals and Salzer Electronics
Assuming the 90 days trading horizon Southern Petrochemicals Industries is expected to generate 0.64 times more return on investment than Salzer Electronics. However, Southern Petrochemicals Industries is 1.56 times less risky than Salzer Electronics. It trades about 0.14 of its potential returns per unit of risk. Salzer Electronics Limited is currently generating about -0.26 per unit of risk. If you would invest 7,352 in Southern Petrochemicals Industries on November 9, 2024 and sell it today you would earn a total of 590.00 from holding Southern Petrochemicals Industries or generate 8.03% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Southern Petrochemicals Indust vs. Salzer Electronics Limited
Performance |
| Timeline |
| Southern Petrochemicals |
| Salzer Electronics |
Southern Petrochemicals and Salzer Electronics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Southern Petrochemicals and Salzer Electronics
The main advantage of trading using opposite Southern Petrochemicals and Salzer Electronics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Southern Petrochemicals position performs unexpectedly, Salzer Electronics 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 Salzer Electronics will offset losses from the drop in Salzer Electronics' long position.| Southern Petrochemicals vs. Tamilnad Mercantile Bank | Southern Petrochemicals vs. UCO Bank | Southern Petrochemicals vs. Hybrid Financial Services | Southern Petrochemicals vs. Alkali Metals Limited |
| Salzer Electronics vs. SIL Investments Limited | Salzer Electronics vs. Dharani SugarsChemicals Limited | Salzer Electronics vs. Kalyani Investment | Salzer Electronics vs. JB Chemicals Pharmaceuticals |
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 Transaction History module to view history of all your transactions and understand their impact on performance.
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