Correlation Between Steelcast and Southern Petrochemicals
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By analyzing existing cross correlation between Steelcast Limited and Southern Petrochemicals Industries, you can compare the effects of market volatilities on Steelcast and Southern 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 Steelcast with a short position of Southern Petrochemicals. Check out your portfolio center. Please also check ongoing floating volatility patterns of Steelcast and Southern Petrochemicals.
Diversification Opportunities for Steelcast and Southern Petrochemicals
0.07 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Steelcast and Southern is 0.07. Overlapping area represents the amount of risk that can be diversified away by holding Steelcast Limited and Southern Petrochemicals Indust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Southern Petrochemicals and Steelcast 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 Steelcast Limited are associated (or correlated) with Southern Petrochemicals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Southern Petrochemicals has no effect on the direction of Steelcast i.e., Steelcast and Southern Petrochemicals go up and down completely randomly.
Pair Corralation between Steelcast and Southern Petrochemicals
Assuming the 90 days trading horizon Steelcast Limited is expected to under-perform the Southern Petrochemicals. In addition to that, Steelcast is 1.33 times more volatile than Southern Petrochemicals Industries. It trades about -0.03 of its total potential returns per unit of risk. Southern Petrochemicals Industries is currently generating about 0.14 per unit of volatility. 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 Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Steelcast Limited vs. Southern Petrochemicals Indust
Performance |
| Timeline |
| Steelcast Limited |
| Southern Petrochemicals |
Steelcast and Southern Petrochemicals Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Steelcast and Southern Petrochemicals
The main advantage of trading using opposite Steelcast and Southern Petrochemicals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Steelcast position performs unexpectedly, Southern 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 Southern Petrochemicals will offset losses from the drop in Southern Petrochemicals' long position.| Steelcast vs. MSP Steel Power | Steelcast vs. NMDC Steel Limited | Steelcast vs. Tata Steel Limited | Steelcast vs. Spandana Sphoorty Financial |
| Southern Petrochemicals vs. Tamilnad Mercantile Bank | Southern Petrochemicals vs. UCO Bank | Southern Petrochemicals vs. Hybrid Financial Services | Southern Petrochemicals vs. Alkali Metals Limited |
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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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