Correlation Between GM Breweries and MRF
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By analyzing existing cross correlation between GM Breweries Limited and MRF Limited, you can compare the effects of market volatilities on GM Breweries 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 GM Breweries with a short position of MRF. Check out your portfolio center. Please also check ongoing floating volatility patterns of GM Breweries and MRF.
Diversification Opportunities for GM Breweries and MRF
0.83 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between GMBREW and MRF is 0.83. Overlapping area represents the amount of risk that can be diversified away by holding GM Breweries Limited and MRF Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MRF Limited 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 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 GM Breweries i.e., GM Breweries and MRF go up and down completely randomly.
Pair Corralation between GM Breweries and MRF
Assuming the 90 days trading horizon GM Breweries Limited is expected to generate 2.6 times more return on investment than MRF. However, GM Breweries is 2.6 times more volatile than MRF Limited. It trades about 0.06 of its potential returns per unit of risk. MRF Limited is currently generating about 0.05 per unit of risk. If you would invest 53,544 in GM Breweries Limited on September 1, 2024 and sell it today you would earn a total of 27,056 from holding GM Breweries Limited or generate 50.53% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 99.25% |
| Values | Daily Returns |
GM Breweries Limited vs. MRF Limited
Performance |
| Timeline |
| GM Breweries Limited |
| MRF Limited |
GM Breweries and MRF Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GM Breweries and MRF
The main advantage of trading using opposite GM Breweries and MRF positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GM Breweries 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.| GM Breweries vs. Indian Metals Ferro | GM Breweries vs. Ankit Metal Power | GM Breweries vs. Pritish Nandy Communications | GM Breweries vs. Music Broadcast Limited |
| 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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
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