Correlation Between Steelcast and Tech Mahindra
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By analyzing existing cross correlation between Steelcast Limited and Tech Mahindra Limited, you can compare the effects of market volatilities on Steelcast and Tech Mahindra 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 Tech Mahindra. Check out your portfolio center. Please also check ongoing floating volatility patterns of Steelcast and Tech Mahindra.
Diversification Opportunities for Steelcast and Tech Mahindra
0.3 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Steelcast and Tech is 0.3. Overlapping area represents the amount of risk that can be diversified away by holding Steelcast Limited and Tech Mahindra Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tech Mahindra Limited 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 Tech Mahindra. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tech Mahindra Limited has no effect on the direction of Steelcast i.e., Steelcast and Tech Mahindra go up and down completely randomly.
Pair Corralation between Steelcast and Tech Mahindra
Assuming the 90 days trading horizon Steelcast Limited is expected to generate 1.4 times more return on investment than Tech Mahindra. However, Steelcast is 1.4 times more volatile than Tech Mahindra Limited. It trades about 0.07 of its potential returns per unit of risk. Tech Mahindra Limited is currently generating about 0.09 per unit of risk. If you would invest 58,964 in Steelcast Limited on September 12, 2024 and sell it today you would earn a total of 32,306 from holding Steelcast Limited or generate 54.79% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Steelcast Limited vs. Tech Mahindra Limited
Performance |
| Timeline |
| Steelcast Limited |
| Tech Mahindra Limited |
Steelcast and Tech Mahindra Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Steelcast and Tech Mahindra
The main advantage of trading using opposite Steelcast and Tech Mahindra positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Steelcast position performs unexpectedly, Tech Mahindra 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 Tech Mahindra will offset losses from the drop in Tech Mahindra's long position.| Steelcast vs. Steel Authority of | Steelcast vs. Embassy Office Parks | Steelcast vs. Indian Metals Ferro | Steelcast vs. JTL Industries |
| Tech Mahindra vs. Steel Authority of | Tech Mahindra vs. NMDC Steel Limited | Tech Mahindra vs. Steelcast Limited | Tech Mahindra vs. MSP Steel Power |
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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