Correlation Between Power Finance and Zensar Technologies

Can any of the company-specific risk be diversified away by investing in both Power Finance and Zensar Technologies 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 Power Finance and Zensar Technologies into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Power Finance and Zensar Technologies Limited, you can compare the effects of market volatilities on Power Finance and Zensar Technologies 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 Power Finance with a short position of Zensar Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of Power Finance and Zensar Technologies.

Diversification Opportunities for Power Finance and Zensar Technologies

0.0

Correlation Coefficient

Power Finance  Zensar Technologies

Pay attention - limited upside

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

Pair Corralation between Power Finance and Zensar Technologies

If you would invest  10,297  in Power Finance on October 25, 2024 and sell it today you would earn a total of  31,763  from holding Power Finance or generate 308.47% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

Power Finance  vs.  Zensar Technologies Limited

Power Finance

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Power Finance has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound technical and fundamental indicators, Power Finance is not utilizing all of its potentials. The latest stock price tumult, may contribute to shorter-term losses for the shareholders.

Zensar Technologies

Risk-Adjusted Performance

0 of 100

Modest

Over the last 90 days Zensar Technologies Limited has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable technical and fundamental indicators, Zensar Technologies is not utilizing all of its potentials. The current stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Power Finance and Zensar Technologies

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

The idea behind Power Finance and Zensar Technologies 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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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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.