Correlation Between MIC Electronics and Sri Havisha

Can any of the company-specific risk be diversified away by investing in both MIC Electronics and Sri Havisha 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 MIC Electronics and Sri Havisha into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between MIC Electronics Limited and Sri Havisha Hospitality, you can compare the effects of market volatilities on MIC Electronics and Sri Havisha 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 MIC Electronics with a short position of Sri Havisha. Check out your portfolio center. Please also check ongoing floating volatility patterns of MIC Electronics and Sri Havisha.

Diversification Opportunities for MIC Electronics and Sri Havisha

0.16

Correlation Coefficient

MIC Electronics  Sri Havisha

Average diversification

The 3 months correlation between MIC and Sri is 0.16. Overlapping area represents the amount of risk that can be diversified away by holding MIC Electronics Limited and Sri Havisha Hospitality in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sri Havisha Hospitality and MIC Electronics 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 MIC Electronics Limited are associated (or correlated) with Sri Havisha. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sri Havisha Hospitality has no effect on the direction of MIC Electronics i.e., MIC Electronics and Sri Havisha go up and down completely randomly.

Pair Corralation between MIC Electronics and Sri Havisha

Assuming the 90 days trading horizon MIC Electronics Limited is expected to generate 1.12 times more return on investment than Sri Havisha. However, MIC Electronics is 1.12 times more volatile than Sri Havisha Hospitality. It trades about 0.13 of its potential returns per unit of risk. Sri Havisha Hospitality is currently generating about 0.02 per unit of risk. If you would invest  1,275  in MIC Electronics Limited on October 11, 2024 and sell it today you would earn a total of  7,170  from holding MIC Electronics Limited or generate 562.35% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	99.79%
Values	Daily Returns

MIC Electronics Limited  vs.  Sri Havisha Hospitality

MIC Electronics

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days MIC Electronics Limited has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unsteady performance in the last few months, the Stock's fundamental indicators remain very healthy which may send shares a bit higher in February 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

Sri Havisha Hospitality

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Sri Havisha Hospitality has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's basic indicators remain somewhat strong which may send shares a bit higher in February 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Pair Trading with MIC Electronics and Sri Havisha

The main advantage of trading using opposite MIC Electronics and Sri Havisha positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MIC Electronics position performs unexpectedly, Sri Havisha 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 Sri Havisha will offset losses from the drop in Sri Havisha's long position.

The idea behind MIC Electronics Limited and Sri Havisha Hospitality 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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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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.