Correlation Between Sintex Plastics and Salzer Electronics

Can any of the company-specific risk be diversified away by investing in both Sintex Plastics and Salzer Electronics 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 Sintex Plastics and Salzer Electronics into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Sintex Plastics Technology and Salzer Electronics Limited, you can compare the effects of market volatilities on Sintex Plastics and Salzer Electronics 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 Sintex Plastics with a short position of Salzer Electronics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sintex Plastics and Salzer Electronics.

Diversification Opportunities for Sintex Plastics and Salzer Electronics

0.0

Correlation Coefficient

Sintex Plastics  Salzer Electronics

Pay attention - limited upside

The 3 months correlation between Sintex and Salzer is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Sintex Plastics Technology and Salzer Electronics Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Salzer Electronics and Sintex Plastics 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 Sintex Plastics Technology are associated (or correlated) with Salzer Electronics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Salzer Electronics has no effect on the direction of Sintex Plastics i.e., Sintex Plastics and Salzer Electronics go up and down completely randomly.

Pair Corralation between Sintex Plastics and Salzer Electronics

If you would invest  104,760  in Salzer Electronics Limited on September 5, 2024 and sell it today you would earn a total of  12,960  from holding Salzer Electronics Limited or generate 12.37% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	98.41%
Values	Daily Returns

Sintex Plastics Technology  vs.  Salzer Electronics Limited

Sintex Plastics Tech

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Sintex Plastics Technology has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, Sintex Plastics is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

Salzer Electronics

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Salzer Electronics Limited are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of rather uncertain essential indicators, Salzer Electronics exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Sintex Plastics and Salzer Electronics

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

The idea behind Sintex Plastics Technology and Salzer Electronics 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.

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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.