Correlation Between Salzer Electronics and Capacite Infraprojects
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By analyzing existing cross correlation between Salzer Electronics Limited and Capacite Infraprojects Limited, you can compare the effects of market volatilities on Salzer Electronics and Capacite Infraprojects 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 Salzer Electronics with a short position of Capacite Infraprojects. Check out your portfolio center. Please also check ongoing floating volatility patterns of Salzer Electronics and Capacite Infraprojects.
Diversification Opportunities for Salzer Electronics and Capacite Infraprojects
0.85 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Salzer and Capacite is 0.85. Overlapping area represents the amount of risk that can be diversified away by holding Salzer Electronics Limited and Capacite Infraprojects Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Capacite Infraprojects and Salzer 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 Salzer Electronics Limited are associated (or correlated) with Capacite Infraprojects. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Capacite Infraprojects has no effect on the direction of Salzer Electronics i.e., Salzer Electronics and Capacite Infraprojects go up and down completely randomly.
Pair Corralation between Salzer Electronics and Capacite Infraprojects
Assuming the 90 days trading horizon Salzer Electronics Limited is expected to generate 1.48 times more return on investment than Capacite Infraprojects. However, Salzer Electronics is 1.48 times more volatile than Capacite Infraprojects Limited. It trades about 0.2 of its potential returns per unit of risk. Capacite Infraprojects Limited is currently generating about 0.19 per unit of risk. If you would invest 108,610 in Salzer Electronics Limited on October 7, 2024 and sell it today you would earn a total of 31,930 from holding Salzer Electronics Limited or generate 29.4% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Strong |
Accuracy | 100.0% |
Values | Daily Returns |
Salzer Electronics Limited vs. Capacite Infraprojects Limited
Performance |
Timeline |
Salzer Electronics |
Capacite Infraprojects |
Salzer Electronics and Capacite Infraprojects Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Salzer Electronics and Capacite Infraprojects
The main advantage of trading using opposite Salzer Electronics and Capacite Infraprojects positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Salzer Electronics position performs unexpectedly, Capacite Infraprojects 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 Capacite Infraprojects will offset losses from the drop in Capacite Infraprojects' long position.Salzer Electronics vs. General Insurance | Salzer Electronics vs. Tata Communications Limited | Salzer Electronics vs. STEEL EXCHANGE INDIA | Salzer Electronics vs. Vardhman Special Steels |
Capacite Infraprojects vs. SAL Steel Limited | Capacite Infraprojects vs. DCB Bank Limited | Capacite Infraprojects vs. Jindal Steel Power | Capacite Infraprojects vs. General Insurance |
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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
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