Correlation Between Golden Tobacco and Allied Blenders
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By analyzing existing cross correlation between Golden Tobacco Limited and Allied Blenders Distillers, you can compare the effects of market volatilities on Golden Tobacco and Allied Blenders 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 Golden Tobacco with a short position of Allied Blenders. Check out your portfolio center. Please also check ongoing floating volatility patterns of Golden Tobacco and Allied Blenders.
Diversification Opportunities for Golden Tobacco and Allied Blenders
0.22 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Golden and Allied is 0.22. Overlapping area represents the amount of risk that can be diversified away by holding Golden Tobacco Limited and Allied Blenders Distillers in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Allied Blenders Dist and Golden Tobacco 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 Golden Tobacco Limited are associated (or correlated) with Allied Blenders. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Allied Blenders Dist has no effect on the direction of Golden Tobacco i.e., Golden Tobacco and Allied Blenders go up and down completely randomly.
Pair Corralation between Golden Tobacco and Allied Blenders
Assuming the 90 days trading horizon Golden Tobacco Limited is expected to under-perform the Allied Blenders. But the stock apears to be less risky and, when comparing its historical volatility, Golden Tobacco Limited is 1.01 times less risky than Allied Blenders. The stock trades about -0.03 of its potential returns per unit of risk. The Allied Blenders Distillers is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest 31,790 in Allied Blenders Distillers on October 11, 2024 and sell it today you would earn a total of 11,125 from holding Allied Blenders Distillers or generate 35.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 27.1% |
| Values | Daily Returns |
Golden Tobacco Limited vs. Allied Blenders Distillers
Performance |
| Timeline |
| Golden Tobacco |
| Allied Blenders Dist |
Golden Tobacco and Allied Blenders Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Golden Tobacco and Allied Blenders
The main advantage of trading using opposite Golden Tobacco and Allied Blenders positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Golden Tobacco position performs unexpectedly, Allied Blenders 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 Allied Blenders will offset losses from the drop in Allied Blenders' long position.| Golden Tobacco vs. HDFC Asset Management | Golden Tobacco vs. Sonata Software Limited | Golden Tobacco vs. Pilani Investment and | Golden Tobacco vs. The State Trading |
| Allied Blenders vs. Tata Investment | Allied Blenders vs. Reliance Communications Limited | Allied Blenders vs. Ortel Communications Limited | Allied Blenders vs. SIL Investments 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 Portfolio Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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