Correlation Between Centum Electronics and MRF
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By analyzing existing cross correlation between Centum Electronics Limited and MRF Limited, you can compare the effects of market volatilities on Centum Electronics and MRF 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 Centum Electronics with a short position of MRF. Check out your portfolio center. Please also check ongoing floating volatility patterns of Centum Electronics and MRF.
Diversification Opportunities for Centum Electronics and MRF
0.37 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Centum and MRF is 0.37. Overlapping area represents the amount of risk that can be diversified away by holding Centum Electronics Limited and MRF Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MRF Limited and Centum Electronics 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 Centum Electronics Limited are associated (or correlated) with MRF. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MRF Limited has no effect on the direction of Centum Electronics i.e., Centum Electronics and MRF go up and down completely randomly.
Pair Corralation between Centum Electronics and MRF
Assuming the 90 days trading horizon Centum Electronics Limited is expected to generate 5.77 times more return on investment than MRF. However, Centum Electronics is 5.77 times more volatile than MRF Limited. It trades about 0.32 of its potential returns per unit of risk. MRF Limited is currently generating about 0.22 per unit of risk. If you would invest 149,530 in Centum Electronics Limited on September 27, 2024 and sell it today you would earn a total of 67,850 from holding Centum Electronics Limited or generate 45.38% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Centum Electronics Limited vs. MRF Limited
Performance |
| Timeline |
| Centum Electronics |
| MRF Limited |
Centum Electronics and MRF Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Centum Electronics and MRF
The main advantage of trading using opposite Centum Electronics and MRF positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Centum Electronics position performs unexpectedly, MRF 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 MRF will offset losses from the drop in MRF's long position.| Centum Electronics vs. Kingfa Science Technology | Centum Electronics vs. Rico Auto Industries | Centum Electronics vs. GACM Technologies Limited | Centum Electronics vs. COSMO FIRST LIMITED |
| MRF vs. Electronics Mart India | MRF vs. Centum Electronics Limited | MRF vs. Cyber Media Research | MRF vs. Shemaroo Entertainment 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 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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