Correlation Between CSB Bank and MRF
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By analyzing existing cross correlation between CSB Bank Limited and MRF Limited, you can compare the effects of market volatilities on CSB Bank 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 CSB Bank with a short position of MRF. Check out your portfolio center. Please also check ongoing floating volatility patterns of CSB Bank and MRF.
Diversification Opportunities for CSB Bank and MRF
Poor diversification
The 3 months correlation between CSB and MRF is 0.64. Overlapping area represents the amount of risk that can be diversified away by holding CSB Bank Limited and MRF Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MRF Limited and CSB Bank 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 CSB Bank 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 CSB Bank i.e., CSB Bank and MRF go up and down completely randomly.
Pair Corralation between CSB Bank and MRF
Assuming the 90 days trading horizon CSB Bank Limited is expected to under-perform the MRF. In addition to that, CSB Bank is 1.01 times more volatile than MRF Limited. It trades about -0.07 of its total potential returns per unit of risk. MRF Limited is currently generating about 0.09 per unit of volatility. If you would invest 12,252,400 in MRF Limited on September 1, 2024 and sell it today you would earn a total of 272,700 from holding MRF Limited or generate 2.23% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
CSB Bank Limited vs. MRF Limited
Performance |
| Timeline |
| CSB Bank Limited |
| MRF Limited |
CSB Bank and MRF Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CSB Bank and MRF
The main advantage of trading using opposite CSB Bank and MRF positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CSB Bank 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.| CSB Bank vs. Ankit Metal Power | CSB Bank vs. United Drilling Tools | CSB Bank vs. Akme Fintrade India | CSB Bank vs. Shivalik Bimetal Controls |
| MRF vs. Osia Hyper Retail | MRF vs. BF Utilities Limited | MRF vs. Sambhaav Media Limited | MRF vs. Touchwood 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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
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