Correlation Between GM Breweries and AVALON TECHNOLOGIES
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By analyzing existing cross correlation between GM Breweries Limited and AVALON TECHNOLOGIES LTD, you can compare the effects of market volatilities on GM Breweries and AVALON TECHNOLOGIES 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 GM Breweries with a short position of AVALON TECHNOLOGIES. Check out your portfolio center. Please also check ongoing floating volatility patterns of GM Breweries and AVALON TECHNOLOGIES.
Diversification Opportunities for GM Breweries and AVALON TECHNOLOGIES
0.24 | Correlation Coefficient |
Modest diversification
The 3 months correlation between GMBREW and AVALON is 0.24. Overlapping area represents the amount of risk that can be diversified away by holding GM Breweries Limited and AVALON TECHNOLOGIES LTD in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AVALON TECHNOLOGIES LTD and GM Breweries 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 GM Breweries Limited are associated (or correlated) with AVALON TECHNOLOGIES. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AVALON TECHNOLOGIES LTD has no effect on the direction of GM Breweries i.e., GM Breweries and AVALON TECHNOLOGIES go up and down completely randomly.
Pair Corralation between GM Breweries and AVALON TECHNOLOGIES
Assuming the 90 days trading horizon GM Breweries Limited is expected to generate 0.85 times more return on investment than AVALON TECHNOLOGIES. However, GM Breweries Limited is 1.17 times less risky than AVALON TECHNOLOGIES. It trades about -0.18 of its potential returns per unit of risk. AVALON TECHNOLOGIES LTD is currently generating about -0.61 per unit of risk. If you would invest 79,220 in GM Breweries Limited on October 28, 2024 and sell it today you would lose (7,570) from holding GM Breweries Limited or give up 9.56% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
GM Breweries Limited vs. AVALON TECHNOLOGIES LTD
Performance |
| Timeline |
| GM Breweries Limited |
| AVALON TECHNOLOGIES LTD |
GM Breweries and AVALON TECHNOLOGIES Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GM Breweries and AVALON TECHNOLOGIES
The main advantage of trading using opposite GM Breweries and AVALON TECHNOLOGIES positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GM Breweries position performs unexpectedly, AVALON TECHNOLOGIES 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 AVALON TECHNOLOGIES will offset losses from the drop in AVALON TECHNOLOGIES's long position.| GM Breweries vs. V Mart Retail Limited | GM Breweries vs. Edelweiss Financial Services | GM Breweries vs. IDBI Bank Limited | GM Breweries vs. United Breweries Limited |
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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 Valuation module to check real value of public entities based on technical and fundamental data.
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