Correlation Between Gokul Refoils and Meghmani Organics
Can any of the company-specific risk be diversified away by investing in both Gokul Refoils and Meghmani Organics at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Gokul Refoils and Meghmani Organics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Gokul Refoils and and Meghmani Organics Limited, you can compare the effects of market volatilities on Gokul Refoils and Meghmani Organics 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 Gokul Refoils with a short position of Meghmani Organics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gokul Refoils and Meghmani Organics.
Diversification Opportunities for Gokul Refoils and Meghmani Organics
-0.13 | Correlation Coefficient |
Good diversification
The 3 months correlation between Gokul and Meghmani is -0.13. Overlapping area represents the amount of risk that can be diversified away by holding Gokul Refoils and and Meghmani Organics Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Meghmani Organics and Gokul Refoils 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 Gokul Refoils and are associated (or correlated) with Meghmani Organics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Meghmani Organics has no effect on the direction of Gokul Refoils i.e., Gokul Refoils and Meghmani Organics go up and down completely randomly.
Pair Corralation between Gokul Refoils and Meghmani Organics
Assuming the 90 days trading horizon Gokul Refoils and is expected to generate 1.16 times more return on investment than Meghmani Organics. However, Gokul Refoils is 1.16 times more volatile than Meghmani Organics Limited. It trades about 0.06 of its potential returns per unit of risk. Meghmani Organics Limited is currently generating about 0.02 per unit of risk. If you would invest 4,360 in Gokul Refoils and on September 1, 2024 and sell it today you would earn a total of 1,085 from holding Gokul Refoils and or generate 24.89% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Gokul Refoils and vs. Meghmani Organics Limited
Performance |
| Timeline |
| Gokul Refoils |
| Meghmani Organics |
Gokul Refoils and Meghmani Organics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Gokul Refoils and Meghmani Organics
The main advantage of trading using opposite Gokul Refoils and Meghmani Organics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Gokul Refoils position performs unexpectedly, Meghmani Organics 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 Meghmani Organics will offset losses from the drop in Meghmani Organics' long position.| Gokul Refoils vs. Kingfa Science Technology | Gokul Refoils vs. Rico Auto Industries | Gokul Refoils vs. GACM Technologies Limited | Gokul Refoils vs. COSMO FIRST LIMITED |
| Meghmani Organics vs. Associated Alcohols Breweries | Meghmani Organics vs. Total Transport Systems | Meghmani Organics vs. Fineotex Chemical Limited | Meghmani Organics vs. GM Breweries 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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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