Correlation Between STEEL EXCHANGE and Electrosteel Castings
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By analyzing existing cross correlation between STEEL EXCHANGE INDIA and Electrosteel Castings Limited, you can compare the effects of market volatilities on STEEL EXCHANGE and Electrosteel Castings 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 STEEL EXCHANGE with a short position of Electrosteel Castings. Check out your portfolio center. Please also check ongoing floating volatility patterns of STEEL EXCHANGE and Electrosteel Castings.
Diversification Opportunities for STEEL EXCHANGE and Electrosteel Castings
0.94 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between STEEL and Electrosteel is 0.94. Overlapping area represents the amount of risk that can be diversified away by holding STEEL EXCHANGE INDIA and Electrosteel Castings Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Electrosteel Castings and STEEL EXCHANGE 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 STEEL EXCHANGE INDIA are associated (or correlated) with Electrosteel Castings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Electrosteel Castings has no effect on the direction of STEEL EXCHANGE i.e., STEEL EXCHANGE and Electrosteel Castings go up and down completely randomly.
Pair Corralation between STEEL EXCHANGE and Electrosteel Castings
Assuming the 90 days trading horizon STEEL EXCHANGE INDIA is expected to generate 0.5 times more return on investment than Electrosteel Castings. However, STEEL EXCHANGE INDIA is 2.0 times less risky than Electrosteel Castings. It trades about -0.24 of its potential returns per unit of risk. Electrosteel Castings Limited is currently generating about -0.23 per unit of risk. If you would invest 1,104 in STEEL EXCHANGE INDIA on August 27, 2024 and sell it today you would lose (85.00) from holding STEEL EXCHANGE INDIA or give up 7.7% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
STEEL EXCHANGE INDIA vs. Electrosteel Castings Limited
Performance |
| Timeline |
| STEEL EXCHANGE INDIA |
| Electrosteel Castings |
STEEL EXCHANGE and Electrosteel Castings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with STEEL EXCHANGE and Electrosteel Castings
The main advantage of trading using opposite STEEL EXCHANGE and Electrosteel Castings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if STEEL EXCHANGE position performs unexpectedly, Electrosteel Castings 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 Electrosteel Castings will offset losses from the drop in Electrosteel Castings' long position.| STEEL EXCHANGE vs. NMDC Limited | STEEL EXCHANGE vs. Steel Authority of | STEEL EXCHANGE vs. Embassy Office Parks | STEEL EXCHANGE vs. Gujarat Narmada Valley |
| Electrosteel Castings vs. NMDC Limited | Electrosteel Castings vs. Steel Authority of | Electrosteel Castings vs. Embassy Office Parks | Electrosteel Castings vs. Gujarat Narmada Valley |
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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
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