Correlation Between Silgo Retail and Automotive Stampings

Can any of the company-specific risk be diversified away by investing in both Silgo Retail and Automotive Stampings 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 Silgo Retail and Automotive Stampings into the same portfolio, which is an essential part of the fundamental portfolio management process.

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

Diversification Opportunities for Silgo Retail and Automotive Stampings

0.66

Correlation Coefficient

Silgo Retail  Automotive Stampings

Poor diversification

The 3 months correlation between Silgo and Automotive is 0.66. Overlapping area represents the amount of risk that can be diversified away by holding Silgo Retail Limited and Automotive Stampings and in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Automotive Stampings and and Silgo Retail 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 Silgo Retail Limited are associated (or correlated) with Automotive Stampings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Automotive Stampings and has no effect on the direction of Silgo Retail i.e., Silgo Retail and Automotive Stampings go up and down completely randomly.

Pair Corralation between Silgo Retail and Automotive Stampings

Assuming the 90 days trading horizon Silgo Retail Limited is expected to under-perform the Automotive Stampings. In addition to that, Silgo Retail is 1.09 times more volatile than Automotive Stampings and. It trades about -0.18 of its total potential returns per unit of risk. Automotive Stampings and is currently generating about -0.04 per unit of volatility. If you would invest  65,210  in Automotive Stampings and on October 24, 2024 and sell it today you would lose (1,645) from holding Automotive Stampings and or give up 2.52% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	100.0%
Values	Daily Returns

Silgo Retail Limited  vs.  Automotive Stampings and

Silgo Retail Limited

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Silgo Retail Limited has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of inconsistent performance in the last few months, the Stock's essential 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.

Automotive Stampings and

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Automotive Stampings and has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest weak performance, the Stock's basic indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the firm private investors.

Pair Trading with Silgo Retail and Automotive Stampings

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

The idea behind Silgo Retail Limited and Automotive Stampings and 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.

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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.