Correlation Between Great Eastern and Power Finance
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By analyzing existing cross correlation between The Great Eastern and Power Finance, you can compare the effects of market volatilities on Great Eastern 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 Great Eastern with a short position of Power Finance. Check out your portfolio center. Please also check ongoing floating volatility patterns of Great Eastern and Power Finance.
Diversification Opportunities for Great Eastern and Power Finance
0.35 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Great and Power is 0.35. Overlapping area represents the amount of risk that can be diversified away by holding The Great Eastern and Power Finance in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Power Finance and Great Eastern 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 The Great Eastern 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 Great Eastern i.e., Great Eastern and Power Finance go up and down completely randomly.
Pair Corralation between Great Eastern and Power Finance
Assuming the 90 days trading horizon The Great Eastern is expected to under-perform the Power Finance. But the stock apears to be less risky and, when comparing its historical volatility, The Great Eastern is 1.11 times less risky than Power Finance. The stock trades about -0.28 of its potential returns per unit of risk. The Power Finance is currently generating about 0.17 of returns per unit of risk over similar time horizon. If you would invest 45,574 in Power Finance on September 2, 2024 and sell it today you would earn a total of 3,956 from holding Power Finance or generate 8.68% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 95.24% |
| Values | Daily Returns |
The Great Eastern vs. Power Finance
Performance |
| Timeline |
| Great Eastern |
| Power Finance |
Great Eastern and Power Finance Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Great Eastern and Power Finance
The main advantage of trading using opposite Great Eastern and Power Finance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Great Eastern 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.| Great Eastern vs. Reliance Industries Limited | Great Eastern vs. HDFC Bank Limited | Great Eastern vs. Tata Consultancy Services | Great Eastern vs. Bharti Airtel Limited |
| Power Finance vs. State Bank of | Power Finance vs. Life Insurance | Power Finance vs. HDFC Bank Limited | Power Finance vs. ICICI Bank 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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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