Correlation Between BF Investment and Shriram Finance
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By analyzing existing cross correlation between BF Investment Limited and Shriram Finance Limited, you can compare the effects of market volatilities on BF Investment and Shriram Finance 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 Shriram Finance. Check out your portfolio center. Please also check ongoing floating volatility patterns of BF Investment and Shriram Finance.
Diversification Opportunities for BF Investment and Shriram Finance
0.11 | Correlation Coefficient |
Average diversification
The 3 months correlation between BFINVEST and Shriram is 0.11. Overlapping area represents the amount of risk that can be diversified away by holding BF Investment Limited and Shriram Finance Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shriram Finance 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 Shriram Finance. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shriram Finance has no effect on the direction of BF Investment i.e., BF Investment and Shriram Finance go up and down completely randomly.
Pair Corralation between BF Investment and Shriram Finance
Assuming the 90 days trading horizon BF Investment Limited is expected to under-perform the Shriram Finance. In addition to that, BF Investment is 1.13 times more volatile than Shriram Finance Limited. It trades about -0.28 of its total potential returns per unit of risk. Shriram Finance Limited is currently generating about -0.17 per unit of volatility. If you would invest 60,684 in Shriram Finance Limited on November 4, 2024 and sell it today you would lose (6,309) from holding Shriram Finance Limited or give up 10.4% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
BF Investment Limited vs. Shriram Finance Limited
Performance |
| Timeline |
| BF Investment Limited |
| Shriram Finance |
BF Investment and Shriram Finance Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BF Investment and Shriram Finance
The main advantage of trading using opposite BF Investment and Shriram Finance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BF Investment position performs unexpectedly, Shriram Finance 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 Shriram Finance will offset losses from the drop in Shriram Finance's long position.| BF Investment vs. Uniinfo Telecom Services | BF Investment vs. Arrow Greentech Limited | BF Investment vs. Tata Communications Limited | BF Investment vs. Beta Drugs |
| Shriram Finance vs. Royal Orchid Hotels | Shriram Finance vs. HDFC Asset Management | Shriram Finance vs. BF Investment Limited | Shriram Finance vs. Taj GVK Hotels |
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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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