Correlation Between Golden Tobacco and MRF
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By analyzing existing cross correlation between Golden Tobacco Limited and MRF Limited, you can compare the effects of market volatilities on Golden Tobacco 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 Golden Tobacco with a short position of MRF. Check out your portfolio center. Please also check ongoing floating volatility patterns of Golden Tobacco and MRF.
Diversification Opportunities for Golden Tobacco and MRF
0.78 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Golden and MRF is 0.78. Overlapping area represents the amount of risk that can be diversified away by holding Golden Tobacco Limited and MRF Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MRF Limited 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 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 Golden Tobacco i.e., Golden Tobacco and MRF go up and down completely randomly.
Pair Corralation between Golden Tobacco and MRF
Assuming the 90 days trading horizon Golden Tobacco Limited is expected to under-perform the MRF. In addition to that, Golden Tobacco is 1.97 times more volatile than MRF Limited. It trades about -0.04 of its total potential returns per unit of risk. MRF Limited is currently generating about 0.06 per unit of volatility. If you would invest 9,068,231 in MRF Limited on September 3, 2024 and sell it today you would earn a total of 3,456,869 from holding MRF Limited or generate 38.12% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Golden Tobacco Limited vs. MRF Limited
Performance |
| Timeline |
| Golden Tobacco |
| MRF Limited |
Golden Tobacco and MRF Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Golden Tobacco and MRF
The main advantage of trading using opposite Golden Tobacco and MRF positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Golden Tobacco 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.| Golden Tobacco vs. Tata Consultancy Services | Golden Tobacco vs. Quess Corp Limited | Golden Tobacco vs. Reliance Industries Limited | Golden Tobacco vs. Infosys Limited |
| MRF vs. Bajaj Holdings Investment | MRF vs. Shipping | MRF vs. Indo Borax Chemicals | MRF vs. Kingfa Science Technology |
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 Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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