Correlation Between WESTLIFE FOODWORLD and Salzer Electronics
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By analyzing existing cross correlation between WESTLIFE FOODWORLD LIMITED and Salzer Electronics Limited, you can compare the effects of market volatilities on WESTLIFE FOODWORLD 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 WESTLIFE FOODWORLD with a short position of Salzer Electronics. Check out your portfolio center. Please also check ongoing floating volatility patterns of WESTLIFE FOODWORLD and Salzer Electronics.
Diversification Opportunities for WESTLIFE FOODWORLD and Salzer Electronics
0.56 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between WESTLIFE and Salzer is 0.56. Overlapping area represents the amount of risk that can be diversified away by holding WESTLIFE FOODWORLD LIMITED and Salzer Electronics Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Salzer Electronics and WESTLIFE FOODWORLD 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 WESTLIFE FOODWORLD LIMITED 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 WESTLIFE FOODWORLD i.e., WESTLIFE FOODWORLD and Salzer Electronics go up and down completely randomly.
Pair Corralation between WESTLIFE FOODWORLD and Salzer Electronics
Assuming the 90 days trading horizon WESTLIFE FOODWORLD LIMITED is expected to generate 0.48 times more return on investment than Salzer Electronics. However, WESTLIFE FOODWORLD LIMITED is 2.1 times less risky than Salzer Electronics. It trades about -0.23 of its potential returns per unit of risk. Salzer Electronics Limited is currently generating about -0.12 per unit of risk. If you would invest 80,380 in WESTLIFE FOODWORLD LIMITED on November 7, 2024 and sell it today you would lose (7,795) from holding WESTLIFE FOODWORLD LIMITED or give up 9.7% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
WESTLIFE FOODWORLD LIMITED vs. Salzer Electronics Limited
Performance |
| Timeline |
| WESTLIFE FOODWORLD |
| Salzer Electronics |
WESTLIFE FOODWORLD and Salzer Electronics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with WESTLIFE FOODWORLD and Salzer Electronics
The main advantage of trading using opposite WESTLIFE FOODWORLD and Salzer Electronics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if WESTLIFE FOODWORLD 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.| WESTLIFE FOODWORLD vs. Newgen Software Technologies | WESTLIFE FOODWORLD vs. Tera Software Limited | WESTLIFE FOODWORLD vs. Sonata Software Limited | WESTLIFE FOODWORLD vs. Selan Exploration Technology |
| Salzer Electronics vs. CSB Bank Limited | Salzer Electronics vs. One 97 Communications | Salzer Electronics vs. RBL Bank Limited | Salzer Electronics vs. Consolidated Construction Consortium |
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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
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