Correlation Between Styrenix Performance and Edelweiss Financial

Can any of the company-specific risk be diversified away by investing in both Styrenix Performance and Edelweiss Financial 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 Styrenix Performance and Edelweiss Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Styrenix Performance Materials and Edelweiss Financial Services, you can compare the effects of market volatilities on Styrenix Performance and Edelweiss Financial 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 Styrenix Performance with a short position of Edelweiss Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Styrenix Performance and Edelweiss Financial.

Diversification Opportunities for Styrenix Performance and Edelweiss Financial

0.49

Correlation Coefficient

Styrenix Performance  Edelweiss Financial

Very weak diversification

The 3 months correlation between Styrenix and Edelweiss is 0.49. Overlapping area represents the amount of risk that can be diversified away by holding Styrenix Performance Materials and Edelweiss Financial Services in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Edelweiss Financial and Styrenix Performance 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 Styrenix Performance Materials are associated (or correlated) with Edelweiss Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Edelweiss Financial has no effect on the direction of Styrenix Performance i.e., Styrenix Performance and Edelweiss Financial go up and down completely randomly.

Pair Corralation between Styrenix Performance and Edelweiss Financial

Assuming the 90 days trading horizon Styrenix Performance Materials is expected to generate 0.74 times more return on investment than Edelweiss Financial. However, Styrenix Performance Materials is 1.35 times less risky than Edelweiss Financial. It trades about -0.04 of its potential returns per unit of risk. Edelweiss Financial Services is currently generating about -0.14 per unit of risk. If you would invest  292,310  in Styrenix Performance Materials on December 28, 2024 and sell it today you would lose (22,210) from holding Styrenix Performance Materials or give up 7.6% of portfolio value over 90 days.

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

Styrenix Performance Materials  vs.  Edelweiss Financial Services

Styrenix Performance

Risk-Adjusted Performance

Very Weak

Over the last 90 days Styrenix Performance Materials has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest inconsistent performance, the Stock's basic indicators remain strong and the recent confusion on Wall Street may also be a sign of long-lasting gains for the firm traders.

Edelweiss Financial

Risk-Adjusted Performance

Very Weak

Over the last 90 days Edelweiss Financial Services has generated negative risk-adjusted returns adding no value to investors with long positions. Despite unfluctuating performance in the last few months, the Stock's forward indicators remain fairly strong which may send shares a bit higher in April 2025. The recent confusion may also be a sign of long-lasting up-swing for the firm traders.

Pair Trading with Styrenix Performance and Edelweiss Financial

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

The idea behind Styrenix Performance Materials and Edelweiss Financial Services 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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.