Correlation Between BF Utilities and Power Finance
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By analyzing existing cross correlation between BF Utilities Limited and Power Finance, you can compare the effects of market volatilities on BF Utilities and Power 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 Utilities with a short position of Power Finance. Check out your portfolio center. Please also check ongoing floating volatility patterns of BF Utilities and Power Finance.
Diversification Opportunities for BF Utilities and Power Finance
0.66 | Correlation Coefficient |
Poor diversification
The 3 months correlation between BFUTILITIE and Power is 0.66. Overlapping area represents the amount of risk that can be diversified away by holding BF Utilities Limited and Power Finance in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Power Finance 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 Power Finance. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Power Finance has no effect on the direction of BF Utilities i.e., BF Utilities and Power Finance go up and down completely randomly.
Pair Corralation between BF Utilities and Power Finance
Assuming the 90 days trading horizon BF Utilities is expected to generate 1.5 times less return on investment than Power Finance. But when comparing it to its historical volatility, BF Utilities Limited is 1.09 times less risky than Power Finance. It trades about 0.07 of its potential returns per unit of risk. Power Finance is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 10,806 in Power Finance on November 8, 2024 and sell it today you would earn a total of 30,454 from holding Power Finance or generate 281.82% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 99.18% |
| Values | Daily Returns |
BF Utilities Limited vs. Power Finance
Performance |
| Timeline |
| BF Utilities Limited |
| Power Finance |
BF Utilities and Power Finance Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BF Utilities and Power Finance
The main advantage of trading using opposite BF Utilities and Power Finance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BF Utilities position performs unexpectedly, Power 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 Power Finance will offset losses from the drop in Power Finance's long position.| BF Utilities vs. Reliance Communications Limited | BF Utilities vs. Tera Software Limited | BF Utilities vs. Sonata Software Limited | BF Utilities vs. Rajnandini Metal Limited |
| Power Finance vs. Indo Borax Chemicals | Power Finance vs. Vraj Iron and | Power Finance vs. Dharani SugarsChemicals Limited | Power Finance vs. Manali Petrochemicals Limited |
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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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