Correlation Between Wipro and SIS
Can any of the company-specific risk be diversified away by investing in both Wipro and SIS 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 Wipro and SIS into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Wipro Limited and SIS LIMITED, you can compare the effects of market volatilities on Wipro and SIS 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 Wipro with a short position of SIS. Check out your portfolio center. Please also check ongoing floating volatility patterns of Wipro and SIS.
Diversification Opportunities for Wipro and SIS
Excellent diversification
The 3 months correlation between Wipro and SIS is -0.69. Overlapping area represents the amount of risk that can be diversified away by holding Wipro Limited and SIS LIMITED in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SIS LIMITED and Wipro 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 Wipro Limited are associated (or correlated) with SIS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SIS LIMITED has no effect on the direction of Wipro i.e., Wipro and SIS go up and down completely randomly.
Pair Corralation between Wipro and SIS
Assuming the 90 days trading horizon Wipro Limited is expected to generate 0.93 times more return on investment than SIS. However, Wipro Limited is 1.07 times less risky than SIS. It trades about 0.17 of its potential returns per unit of risk. SIS LIMITED is currently generating about 0.0 per unit of risk. If you would invest 55,920 in Wipro Limited on August 29, 2024 and sell it today you would earn a total of 2,980 from holding Wipro Limited or generate 5.33% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Wipro Limited vs. SIS LIMITED
Performance |
| Timeline |
| Wipro Limited |
| SIS LIMITED |
Wipro and SIS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Wipro and SIS
The main advantage of trading using opposite Wipro and SIS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Wipro position performs unexpectedly, SIS 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 SIS will offset losses from the drop in SIS's long position.| Wipro vs. Aster DM Healthcare | Wipro vs. Rajnandini Metal Limited | Wipro vs. LLOYDS METALS AND | Wipro vs. Fortis Healthcare 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 Global Correlations module to find global opportunities by holding instruments from different markets.
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