Correlation Between STEEL EXCHANGE and Future Retail

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Can any of the company-specific risk be diversified away by investing in both STEEL EXCHANGE and Future Retail 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 STEEL EXCHANGE and Future Retail into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between STEEL EXCHANGE INDIA and Future Retail Limited, you can compare the effects of market volatilities on STEEL EXCHANGE and Future Retail 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 Future Retail. Check out your portfolio center. Please also check ongoing floating volatility patterns of STEEL EXCHANGE and Future Retail.

Diversification Opportunities for STEEL EXCHANGE and Future Retail

0.0
  Correlation Coefficient

Pay attention - limited upside

The 3 months correlation between STEEL and Future is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding STEEL EXCHANGE INDIA and Future Retail Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Future Retail Limited 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 Future Retail. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Future Retail Limited has no effect on the direction of STEEL EXCHANGE i.e., STEEL EXCHANGE and Future Retail go up and down completely randomly.

Pair Corralation between STEEL EXCHANGE and Future Retail

If you would invest  1,086  in STEEL EXCHANGE INDIA on September 12, 2024 and sell it today you would earn a total of  34.00  from holding STEEL EXCHANGE INDIA or generate 3.13% return on investment over 90 days.
Time Period3 Months [change]
DirectionFlat 
StrengthInsignificant
Accuracy100.0%
ValuesDaily Returns

STEEL EXCHANGE INDIA  vs.  Future Retail Limited

 Performance 
       Timeline  
STEEL EXCHANGE INDIA 

Risk-Adjusted Performance

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Over the last 90 days STEEL EXCHANGE INDIA has generated negative risk-adjusted returns adding no value to investors with long positions. Despite uncertain performance in the last few months, the Stock's forward indicators remain fairly strong which may send shares a bit higher in January 2025. The recent confusion may also be a sign of long-lasting up-swing for the firm traders.
Future Retail Limited 

Risk-Adjusted Performance

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Weak
 
Strong
Very Weak
Over the last 90 days Future Retail Limited has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent basic indicators, Future Retail is not utilizing all of its potentials. The recent stock price mess, may contribute to short-term losses for the institutional investors.

STEEL EXCHANGE and Future Retail Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with STEEL EXCHANGE and Future Retail

The main advantage of trading using opposite STEEL EXCHANGE and Future Retail positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if STEEL EXCHANGE position performs unexpectedly, Future Retail 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 Retail will offset losses from the drop in Future Retail's long position.
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The idea behind STEEL EXCHANGE INDIA and Future Retail Limited pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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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 Commodity Directory module to find actively traded commodities issued by global exchanges.

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