Correlation Between CEAT and Electronics Mart
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By analyzing existing cross correlation between CEAT Limited and Electronics Mart India, you can compare the effects of market volatilities on CEAT and Electronics Mart 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 CEAT with a short position of Electronics Mart. Check out your portfolio center. Please also check ongoing floating volatility patterns of CEAT and Electronics Mart.
Diversification Opportunities for CEAT and Electronics Mart
0.32 | Correlation Coefficient |
Weak diversification
The 3 months correlation between CEAT and Electronics is 0.32. Overlapping area represents the amount of risk that can be diversified away by holding CEAT Limited and Electronics Mart India in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Electronics Mart India and CEAT 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 CEAT Limited are associated (or correlated) with Electronics Mart. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Electronics Mart India has no effect on the direction of CEAT i.e., CEAT and Electronics Mart go up and down completely randomly.
Pair Corralation between CEAT and Electronics Mart
Assuming the 90 days trading horizon CEAT Limited is expected to generate 0.74 times more return on investment than Electronics Mart. However, CEAT Limited is 1.36 times less risky than Electronics Mart. It trades about 0.07 of its potential returns per unit of risk. Electronics Mart India is currently generating about -0.08 per unit of risk. If you would invest 285,125 in CEAT Limited on September 8, 2024 and sell it today you would earn a total of 24,445 from holding CEAT Limited or generate 8.57% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Very Weak |
Accuracy | 100.0% |
Values | Daily Returns |
CEAT Limited vs. Electronics Mart India
Performance |
Timeline |
CEAT Limited |
Electronics Mart India |
CEAT and Electronics Mart Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with CEAT and Electronics Mart
The main advantage of trading using opposite CEAT and Electronics Mart positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CEAT position performs unexpectedly, Electronics Mart 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 Electronics Mart will offset losses from the drop in Electronics Mart's long position.CEAT vs. Biofil Chemicals Pharmaceuticals | CEAT vs. Shree Pushkar Chemicals | CEAT vs. FCS Software Solutions | CEAT vs. Thirumalai Chemicals 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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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