Correlation Between BF Investment and Tarapur Transformers
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By analyzing existing cross correlation between BF Investment Limited and Tarapur Transformers Limited, you can compare the effects of market volatilities on BF Investment and Tarapur Transformers 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 Tarapur Transformers. Check out your portfolio center. Please also check ongoing floating volatility patterns of BF Investment and Tarapur Transformers.
Diversification Opportunities for BF Investment and Tarapur Transformers
-0.04 | Correlation Coefficient |
Good diversification
The 3 months correlation between BFINVEST and Tarapur is -0.04. Overlapping area represents the amount of risk that can be diversified away by holding BF Investment Limited and Tarapur Transformers Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tarapur Transformers 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 Tarapur Transformers. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tarapur Transformers has no effect on the direction of BF Investment i.e., BF Investment and Tarapur Transformers go up and down completely randomly.
Pair Corralation between BF Investment and Tarapur Transformers
Assuming the 90 days trading horizon BF Investment Limited is expected to generate 0.81 times more return on investment than Tarapur Transformers. However, BF Investment Limited is 1.23 times less risky than Tarapur Transformers. It trades about -0.2 of its potential returns per unit of risk. Tarapur Transformers Limited is currently generating about -0.52 per unit of risk. If you would invest 62,230 in BF Investment Limited on November 7, 2024 and sell it today you would lose (7,865) from holding BF Investment Limited or give up 12.64% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
BF Investment Limited vs. Tarapur Transformers Limited
Performance |
| Timeline |
| BF Investment Limited |
| Tarapur Transformers |
BF Investment and Tarapur Transformers Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BF Investment and Tarapur Transformers
The main advantage of trading using opposite BF Investment and Tarapur Transformers positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BF Investment position performs unexpectedly, Tarapur Transformers 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 Tarapur Transformers will offset losses from the drop in Tarapur Transformers' long position.| BF Investment vs. MRF Limited | BF Investment vs. The Orissa Minerals | BF Investment vs. Honeywell Automation India | BF Investment vs. Page Industries Limited |
| Tarapur Transformers vs. Life Insurance | Tarapur Transformers vs. Power Finance | Tarapur Transformers vs. HDFC Bank Limited | Tarapur Transformers vs. State Bank of |
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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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