Correlation Between GM Breweries and Megastar Foods
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By analyzing existing cross correlation between GM Breweries Limited and Megastar Foods Limited, you can compare the effects of market volatilities on GM Breweries and Megastar Foods 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 Megastar Foods. Check out your portfolio center. Please also check ongoing floating volatility patterns of GM Breweries and Megastar Foods.
Diversification Opportunities for GM Breweries and Megastar Foods
-0.28 | Correlation Coefficient |
Very good diversification
The 3 months correlation between GMBREW and Megastar is -0.28. Overlapping area represents the amount of risk that can be diversified away by holding GM Breweries Limited and Megastar Foods Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Megastar Foods 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 Megastar Foods. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Megastar Foods has no effect on the direction of GM Breweries i.e., GM Breweries and Megastar Foods go up and down completely randomly.
Pair Corralation between GM Breweries and Megastar Foods
Assuming the 90 days trading horizon GM Breweries Limited is expected to under-perform the Megastar Foods. But the stock apears to be less risky and, when comparing its historical volatility, GM Breweries Limited is 1.2 times less risky than Megastar Foods. The stock trades about -0.09 of its potential returns per unit of risk. The Megastar Foods Limited is currently generating about -0.03 of returns per unit of risk over similar time horizon. If you would invest 26,820 in Megastar Foods Limited on November 1, 2024 and sell it today you would lose (2,919) from holding Megastar Foods Limited or give up 10.88% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
GM Breweries Limited vs. Megastar Foods Limited
Performance |
| Timeline |
| GM Breweries Limited |
| Megastar Foods |
GM Breweries and Megastar Foods Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GM Breweries and Megastar Foods
The main advantage of trading using opposite GM Breweries and Megastar Foods positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GM Breweries position performs unexpectedly, Megastar Foods 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 Megastar Foods will offset losses from the drop in Megastar Foods' long position.| GM Breweries vs. Can Fin Homes | GM Breweries vs. Bharat Road Network | GM Breweries vs. EMBASSY OFFICE PARKS | GM Breweries vs. Spencers Retail Limited |
| Megastar Foods vs. Gangotri Textiles Limited | Megastar Foods vs. Hemisphere Properties India | Megastar Foods vs. Kingfa Science Technology | Megastar Foods vs. Rico Auto Industries |
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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
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