Correlation Between Silver Touch and EPL

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

By analyzing existing cross correlation between Silver Touch Technologies and EPL Limited, you can compare the effects of market volatilities on Silver Touch and EPL 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 Silver Touch with a short position of EPL. Check out your portfolio center. Please also check ongoing floating volatility patterns of Silver Touch and EPL.

Diversification Opportunities for Silver Touch and EPL

0.2

Correlation Coefficient

Silver Touch  EPL

Modest diversification

The 3 months correlation between Silver and EPL is 0.2. Overlapping area represents the amount of risk that can be diversified away by holding Silver Touch Technologies and EPL Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on EPL Limited and Silver Touch 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 Silver Touch Technologies are associated (or correlated) with EPL. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of EPL Limited has no effect on the direction of Silver Touch i.e., Silver Touch and EPL go up and down completely randomly.

Pair Corralation between Silver Touch and EPL

Assuming the 90 days trading horizon Silver Touch Technologies is expected to under-perform the EPL. In addition to that, Silver Touch is 1.17 times more volatile than EPL Limited. It trades about -0.03 of its total potential returns per unit of risk. EPL Limited is currently generating about 0.13 per unit of volatility. If you would invest  19,906  in EPL Limited on April 24, 2025 and sell it today you would earn a total of  3,284  from holding EPL Limited or generate 16.5% return on investment over 90 days.

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

Silver Touch Technologies  vs.  EPL Limited

Silver Touch Technologies

Risk-Adjusted Performance

Very Weak

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

EPL Limited

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in EPL Limited are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. In spite of rather weak technical and fundamental indicators, EPL exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Silver Touch and EPL

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

The idea behind Silver Touch Technologies and EPL 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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.