Correlation Between BF Utilities and Asian Paints
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By analyzing existing cross correlation between BF Utilities Limited and Asian Paints Limited, you can compare the effects of market volatilities on BF Utilities and Asian Paints 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 Utilities with a short position of Asian Paints. Check out your portfolio center. Please also check ongoing floating volatility patterns of BF Utilities and Asian Paints.
Diversification Opportunities for BF Utilities and Asian Paints
-0.34 | Correlation Coefficient |
Very good diversification
The 3 months correlation between BFUTILITIE and Asian is -0.34. Overlapping area represents the amount of risk that can be diversified away by holding BF Utilities Limited and Asian Paints Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Asian Paints Limited and BF Utilities 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 Utilities Limited are associated (or correlated) with Asian Paints. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Asian Paints Limited has no effect on the direction of BF Utilities i.e., BF Utilities and Asian Paints go up and down completely randomly.
Pair Corralation between BF Utilities and Asian Paints
Assuming the 90 days trading horizon BF Utilities Limited is expected to generate 3.0 times more return on investment than Asian Paints. However, BF Utilities is 3.0 times more volatile than Asian Paints Limited. It trades about 0.09 of its potential returns per unit of risk. Asian Paints Limited is currently generating about -0.08 per unit of risk. If you would invest 37,275 in BF Utilities Limited on September 12, 2024 and sell it today you would earn a total of 54,595 from holding BF Utilities Limited or generate 146.47% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.71% |
| Values | Daily Returns |
BF Utilities Limited vs. Asian Paints Limited
Performance |
| Timeline |
| BF Utilities Limited |
| Asian Paints Limited |
BF Utilities and Asian Paints Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BF Utilities and Asian Paints
The main advantage of trading using opposite BF Utilities and Asian Paints positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BF Utilities position performs unexpectedly, Asian Paints 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 Asian Paints will offset losses from the drop in Asian Paints' long position.| BF Utilities vs. India Glycols Limited | BF Utilities vs. Indo Borax Chemicals | BF Utilities vs. Kingfa Science Technology | BF Utilities vs. Alkali Metals Limited |
| Asian Paints vs. Max Financial Services | Asian Paints vs. Manaksia Coated Metals | Asian Paints vs. ICICI Bank Limited | Asian Paints vs. MAS Financial Services |
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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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