Correlation Between Golden Tobacco and Malu Paper
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By analyzing existing cross correlation between Golden Tobacco Limited and Malu Paper Mills, you can compare the effects of market volatilities on Golden Tobacco and Malu Paper 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 Malu Paper. Check out your portfolio center. Please also check ongoing floating volatility patterns of Golden Tobacco and Malu Paper.
Diversification Opportunities for Golden Tobacco and Malu Paper
0.6 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Golden and Malu is 0.6. Overlapping area represents the amount of risk that can be diversified away by holding Golden Tobacco Limited and Malu Paper Mills in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Malu Paper Mills 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 Malu Paper. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Malu Paper Mills has no effect on the direction of Golden Tobacco i.e., Golden Tobacco and Malu Paper go up and down completely randomly.
Pair Corralation between Golden Tobacco and Malu Paper
Assuming the 90 days trading horizon Golden Tobacco Limited is expected to under-perform the Malu Paper. But the stock apears to be less risky and, when comparing its historical volatility, Golden Tobacco Limited is 1.5 times less risky than Malu Paper. The stock trades about -0.04 of its potential returns per unit of risk. The Malu Paper Mills is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 3,265 in Malu Paper Mills on September 4, 2024 and sell it today you would earn a total of 2,031 from holding Malu Paper Mills or generate 62.21% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 99.39% |
| Values | Daily Returns |
Golden Tobacco Limited vs. Malu Paper Mills
Performance |
| Timeline |
| Golden Tobacco |
| Malu Paper Mills |
Golden Tobacco and Malu Paper Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Golden Tobacco and Malu Paper
The main advantage of trading using opposite Golden Tobacco and Malu Paper positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Golden Tobacco position performs unexpectedly, Malu Paper 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 Malu Paper will offset losses from the drop in Malu Paper's long position.| Golden Tobacco vs. State Bank of | Golden Tobacco vs. Life Insurance | Golden Tobacco vs. HDFC Bank Limited | Golden Tobacco vs. ICICI Bank Limited |
| Malu Paper vs. Radaan Mediaworks India | Malu Paper vs. Golden Tobacco Limited | Malu Paper vs. Sambhaav Media Limited | Malu Paper vs. Kohinoor Foods 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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
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