Correlation Between Industrial Investment and Silgo Retail

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Can any of the company-specific risk be diversified away by investing in both Industrial Investment and Silgo Retail 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 Industrial Investment and Silgo Retail into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Industrial Investment Trust and Silgo Retail Limited, you can compare the effects of market volatilities on Industrial Investment and Silgo Retail 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 Industrial Investment with a short position of Silgo Retail. Check out your portfolio center. Please also check ongoing floating volatility patterns of Industrial Investment and Silgo Retail.

Diversification Opportunities for Industrial Investment and Silgo Retail

IndustrialSilgoDiversified AwayIndustrialSilgoDiversified Away100%
-0.64
  Correlation Coefficient

Excellent diversification

The 3 months correlation between Industrial and Silgo is -0.64. Overlapping area represents the amount of risk that can be diversified away by holding Industrial Investment Trust and Silgo Retail Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Silgo Retail Limited and Industrial Investment 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 Industrial Investment Trust are associated (or correlated) with Silgo Retail. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Silgo Retail Limited has no effect on the direction of Industrial Investment i.e., Industrial Investment and Silgo Retail go up and down completely randomly.

Pair Corralation between Industrial Investment and Silgo Retail

Assuming the 90 days trading horizon Industrial Investment Trust is expected to generate 0.54 times more return on investment than Silgo Retail. However, Industrial Investment Trust is 1.86 times less risky than Silgo Retail. It trades about 0.28 of its potential returns per unit of risk. Silgo Retail Limited is currently generating about -0.02 per unit of risk. If you would invest  26,620  in Industrial Investment Trust on September 19, 2024 and sell it today you would earn a total of  12,330  from holding Industrial Investment Trust or generate 46.32% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthWeak
Accuracy98.41%
ValuesDaily Returns

Industrial Investment Trust  vs.  Silgo Retail Limited

 Performance 
JavaScript chart by amCharts 3.21.15OctNovDec 0102030405060
JavaScript chart by amCharts 3.21.15IITL SILGO
       Timeline  
Industrial Investment 

Risk-Adjusted Performance

22 of 100

 
Weak
 
Strong
Solid
Compared to the overall equity markets, risk-adjusted returns on investments in Industrial Investment Trust are ranked lower than 22 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively unsteady basic indicators, Industrial Investment unveiled solid returns over the last few months and may actually be approaching a breakup point.
JavaScript chart by amCharts 3.21.15OctNovDecNovDec300350400450
Silgo Retail Limited 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
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 very healthy essential indicators, Silgo Retail is not utilizing all of its potentials. The latest stock price disarray, may contribute to short-term losses for the investors.
JavaScript chart by amCharts 3.21.15OctNovDecNovDec3840424446485052

Industrial Investment and Silgo Retail Volatility Contrast

   Predicted Return Density   
JavaScript chart by amCharts 3.21.15-6.54-4.9-3.26-1.620.01.843.735.637.539.43 0.020.030.040.050.060.070.08
JavaScript chart by amCharts 3.21.15IITL SILGO
       Returns  

Pair Trading with Industrial Investment and Silgo Retail

The main advantage of trading using opposite Industrial Investment and Silgo Retail positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Industrial Investment position performs unexpectedly, Silgo Retail 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 Silgo Retail will offset losses from the drop in Silgo Retail's long position.
The idea behind Industrial Investment Trust and Silgo Retail Limited 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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.

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