Correlation Between BF Investment and NMDC Steel
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By analyzing existing cross correlation between BF Investment Limited and NMDC Steel Limited, you can compare the effects of market volatilities on BF Investment and NMDC Steel 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 BF Investment with a short position of NMDC Steel. Check out your portfolio center. Please also check ongoing floating volatility patterns of BF Investment and NMDC Steel.
Diversification Opportunities for BF Investment and NMDC Steel
-0.82 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between BFINVEST and NMDC is -0.82. Overlapping area represents the amount of risk that can be diversified away by holding BF Investment Limited and NMDC Steel Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NMDC Steel Limited and BF 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 BF Investment Limited are associated (or correlated) with NMDC Steel. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NMDC Steel Limited has no effect on the direction of BF Investment i.e., BF Investment and NMDC Steel go up and down completely randomly.
Pair Corralation between BF Investment and NMDC Steel
Assuming the 90 days trading horizon BF Investment Limited is expected to generate 1.11 times more return on investment than NMDC Steel. However, BF Investment is 1.11 times more volatile than NMDC Steel Limited. It trades about 0.07 of its potential returns per unit of risk. NMDC Steel Limited is currently generating about 0.02 per unit of risk. If you would invest 38,160 in BF Investment Limited on August 31, 2024 and sell it today you would earn a total of 35,120 from holding BF Investment Limited or generate 92.03% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 99.46% |
| Values | Daily Returns |
BF Investment Limited vs. NMDC Steel Limited
Performance |
| Timeline |
| BF Investment Limited |
| NMDC Steel Limited |
BF Investment and NMDC Steel Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BF Investment and NMDC Steel
The main advantage of trading using opposite BF Investment and NMDC Steel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BF Investment position performs unexpectedly, NMDC Steel 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 NMDC Steel will offset losses from the drop in NMDC Steel's long position.| BF Investment vs. Manaksia Steels Limited | BF Investment vs. Steelcast Limited | BF Investment vs. Kohinoor Foods Limited | BF Investment vs. Varun Beverages Limited |
| NMDC Steel vs. Dev Information Technology | NMDC Steel vs. Infomedia Press Limited | NMDC Steel vs. Kaynes Technology India | NMDC Steel vs. Diligent Media |
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 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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