Correlation Between Spencers Retail and Newgen Software
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By analyzing existing cross correlation between Spencers Retail Limited and Newgen Software Technologies, you can compare the effects of market volatilities on Spencers Retail and Newgen Software 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 Spencers Retail with a short position of Newgen Software. Check out your portfolio center. Please also check ongoing floating volatility patterns of Spencers Retail and Newgen Software.
Diversification Opportunities for Spencers Retail and Newgen Software
0.2 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Spencers and Newgen is 0.2. Overlapping area represents the amount of risk that can be diversified away by holding Spencers Retail Limited and Newgen Software Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Newgen Software Tech and Spencers 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 Spencers Retail Limited are associated (or correlated) with Newgen Software. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Newgen Software Tech has no effect on the direction of Spencers Retail i.e., Spencers Retail and Newgen Software go up and down completely randomly.
Pair Corralation between Spencers Retail and Newgen Software
Assuming the 90 days trading horizon Spencers Retail Limited is expected to under-perform the Newgen Software. But the stock apears to be less risky and, when comparing its historical volatility, Spencers Retail Limited is 1.39 times less risky than Newgen Software. The stock trades about -0.16 of its potential returns per unit of risk. The Newgen Software Technologies is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest 130,425 in Newgen Software Technologies on September 25, 2024 and sell it today you would earn a total of 28,110 from holding Newgen Software Technologies or generate 21.55% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Very Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Spencers Retail Limited vs. Newgen Software Technologies
Performance |
Timeline |
Spencers Retail |
Newgen Software Tech |
Spencers Retail and Newgen Software Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Spencers Retail and Newgen Software
The main advantage of trading using opposite Spencers Retail and Newgen Software positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Spencers Retail position performs unexpectedly, Newgen Software 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 Newgen Software will offset losses from the drop in Newgen Software's long position.Spencers Retail vs. Newgen Software Technologies | Spencers Retail vs. R S Software | Spencers Retail vs. Clean Science and | Spencers Retail vs. ADF Foods Limited |
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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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
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