Correlation Between SRF and Tinna Rubber

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

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

Diversification Opportunities for SRF and Tinna Rubber

-0.46

Correlation Coefficient

SRF  Tinna Rubber

Very good diversification

The 3 months correlation between SRF and Tinna is -0.46. Overlapping area represents the amount of risk that can be diversified away by holding SRF Limited and Tinna Rubber and in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tinna Rubber and SRF 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 SRF Limited are associated (or correlated) with Tinna Rubber. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tinna Rubber has no effect on the direction of SRF i.e., SRF and Tinna Rubber go up and down completely randomly.

Pair Corralation between SRF and Tinna Rubber

Assuming the 90 days trading horizon SRF Limited is expected to generate 0.78 times more return on investment than Tinna Rubber. However, SRF Limited is 1.28 times less risky than Tinna Rubber. It trades about 0.08 of its potential returns per unit of risk. Tinna Rubber and is currently generating about -0.04 per unit of risk. If you would invest  297,900  in SRF Limited on April 25, 2025 and sell it today you would earn a total of  21,400  from holding SRF Limited or generate 7.18% return on investment over 90 days.

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

SRF Limited  vs.  Tinna Rubber and

SRF Limited

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in SRF Limited are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of rather uncertain technical and fundamental indicators, SRF may actually be approaching a critical reversion point that can send shares even higher in August 2025.

Tinna Rubber

Risk-Adjusted Performance

Very Weak

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

Pair Trading with SRF and Tinna Rubber

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

The idea behind SRF Limited and Tinna Rubber and 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 Stocks Directory module to find actively traded stocks across global markets.