Correlation Between Newgen Software and Roto Pumps
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By analyzing existing cross correlation between Newgen Software Technologies and Roto Pumps Limited, you can compare the effects of market volatilities on Newgen Software and Roto Pumps 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 Newgen Software with a short position of Roto Pumps. Check out your portfolio center. Please also check ongoing floating volatility patterns of Newgen Software and Roto Pumps.
Diversification Opportunities for Newgen Software and Roto Pumps
0.87 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Newgen and Roto is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding Newgen Software Technologies and Roto Pumps Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Roto Pumps Limited and Newgen Software 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 Newgen Software Technologies are associated (or correlated) with Roto Pumps. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Roto Pumps Limited has no effect on the direction of Newgen Software i.e., Newgen Software and Roto Pumps go up and down completely randomly.
Pair Corralation between Newgen Software and Roto Pumps
Assuming the 90 days trading horizon Newgen Software Technologies is expected to generate 1.13 times more return on investment than Roto Pumps. However, Newgen Software is 1.13 times more volatile than Roto Pumps Limited. It trades about 0.17 of its potential returns per unit of risk. Roto Pumps Limited is currently generating about 0.11 per unit of risk. If you would invest 123,400 in Newgen Software Technologies on September 23, 2024 and sell it today you would earn a total of 34,005 from holding Newgen Software Technologies or generate 27.56% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Strong |
Accuracy | 100.0% |
Values | Daily Returns |
Newgen Software Technologies vs. Roto Pumps Limited
Performance |
Timeline |
Newgen Software Tech |
Roto Pumps Limited |
Newgen Software and Roto Pumps Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Newgen Software and Roto Pumps
The main advantage of trading using opposite Newgen Software and Roto Pumps positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Newgen Software position performs unexpectedly, Roto Pumps 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 Roto Pumps will offset losses from the drop in Roto Pumps' long position.Newgen Software vs. Kingfa Science Technology | Newgen Software vs. Rico Auto Industries | Newgen Software vs. GACM Technologies Limited | Newgen Software vs. COSMO FIRST 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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