Correlation Between Fedbank Financial and GM Breweries
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By analyzing existing cross correlation between Fedbank Financial Services and GM Breweries Limited, you can compare the effects of market volatilities on Fedbank Financial and GM Breweries 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 Fedbank Financial with a short position of GM Breweries. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fedbank Financial and GM Breweries.
Diversification Opportunities for Fedbank Financial and GM Breweries
0.68 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Fedbank and GMBREW is 0.68. Overlapping area represents the amount of risk that can be diversified away by holding Fedbank Financial Services and GM Breweries Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GM Breweries Limited and Fedbank Financial 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 Fedbank Financial Services are associated (or correlated) with GM Breweries. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GM Breweries Limited has no effect on the direction of Fedbank Financial i.e., Fedbank Financial and GM Breweries go up and down completely randomly.
Pair Corralation between Fedbank Financial and GM Breweries
Assuming the 90 days trading horizon Fedbank Financial Services is expected to under-perform the GM Breweries. But the stock apears to be less risky and, when comparing its historical volatility, Fedbank Financial Services is 2.14 times less risky than GM Breweries. The stock trades about -0.07 of its potential returns per unit of risk. The GM Breweries Limited is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 45,830 in GM Breweries Limited on October 16, 2024 and sell it today you would earn a total of 25,100 from holding GM Breweries Limited or generate 54.77% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 56.79% |
| Values | Daily Returns |
Fedbank Financial Services vs. GM Breweries Limited
Performance |
| Timeline |
| Fedbank Financial |
| GM Breweries Limited |
Fedbank Financial and GM Breweries Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fedbank Financial and GM Breweries
The main advantage of trading using opposite Fedbank Financial and GM Breweries positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fedbank Financial position performs unexpectedly, GM Breweries 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 GM Breweries will offset losses from the drop in GM Breweries' long position.| Fedbank Financial vs. Kingfa Science Technology | Fedbank Financial vs. Rico Auto Industries | Fedbank Financial vs. GACM Technologies Limited | Fedbank Financial vs. COSMO FIRST LIMITED |
| GM Breweries vs. Shyam Metalics and | GM Breweries vs. Music Broadcast Limited | GM Breweries vs. Indian Metals Ferro | GM Breweries vs. Praxis Home Retail |
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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
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