Correlation Between GM Breweries and Power Finance
Specify exactly 2 symbols:
By analyzing existing cross correlation between GM Breweries Limited and Power Finance, you can compare the effects of market volatilities on GM Breweries 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 GM Breweries with a short position of Power Finance. Check out your portfolio center. Please also check ongoing floating volatility patterns of GM Breweries and Power Finance.
Diversification Opportunities for GM Breweries and Power Finance
0.77 | Correlation Coefficient |
Poor diversification
The 3 months correlation between GMBREW and Power is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding GM Breweries Limited and Power Finance in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Power Finance 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 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 GM Breweries i.e., GM Breweries and Power Finance go up and down completely randomly.
Pair Corralation between GM Breweries and Power Finance
Assuming the 90 days trading horizon GM Breweries Limited is expected to under-perform the Power Finance. But the stock apears to be less risky and, when comparing its historical volatility, GM Breweries Limited is 1.07 times less risky than Power Finance. The stock trades about -0.22 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 44,850 in Power Finance on November 1, 2024 and sell it today you would lose (4,940) from holding Power Finance or give up 11.01% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
GM Breweries Limited vs. Power Finance
Performance |
| Timeline |
| GM Breweries Limited |
| Power Finance |
GM Breweries and Power Finance Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GM Breweries and Power Finance
The main advantage of trading using opposite GM Breweries and Power Finance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GM Breweries 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.| GM Breweries vs. Can Fin Homes | GM Breweries vs. Bharat Road Network | GM Breweries vs. EMBASSY OFFICE PARKS | GM Breweries vs. Spencers Retail Limited |
| Power Finance vs. GM Breweries Limited | Power Finance vs. Hemisphere Properties India | Power Finance vs. KNR Constructions Limited | Power Finance vs. Gallantt Ispat 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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
Other Complementary Tools
| Aroon Oscillator Analyze current equity momentum using Aroon Oscillator and other momentum ratios | |
| Stock Screener Find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook. | |
| Portfolio Center All portfolio management and optimization tools to improve performance of your portfolios | |
| Options Analysis Analyze and evaluate options and option chains as a potential hedge for your portfolios | |
| Sign In To Macroaxis Sign in to explore Macroaxis' wealth optimization platform and fintech modules |