Correlation Between HMT and 3M India
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By analyzing existing cross correlation between HMT Limited and 3M India Limited, you can compare the effects of market volatilities on HMT and 3M India 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 HMT with a short position of 3M India. Check out your portfolio center. Please also check ongoing floating volatility patterns of HMT and 3M India.
Diversification Opportunities for HMT and 3M India
Poor diversification
The 3 months correlation between HMT and 3MINDIA is 0.68. Overlapping area represents the amount of risk that can be diversified away by holding HMT Limited and 3M India Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on 3M India Limited and HMT 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 HMT Limited are associated (or correlated) with 3M India. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of 3M India Limited has no effect on the direction of HMT i.e., HMT and 3M India go up and down completely randomly.
Pair Corralation between HMT and 3M India
Assuming the 90 days trading horizon HMT Limited is expected to under-perform the 3M India. In addition to that, HMT is 1.12 times more volatile than 3M India Limited. It trades about -0.28 of its total potential returns per unit of risk. 3M India Limited is currently generating about -0.28 per unit of volatility. If you would invest 3,604,760 in 3M India Limited on September 1, 2024 and sell it today you would lose (380,230) from holding 3M India Limited or give up 10.55% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
HMT Limited vs. 3M India Limited
Performance |
| Timeline |
| HMT Limited |
| 3M India Limited |
HMT and 3M India Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with HMT and 3M India
The main advantage of trading using opposite HMT and 3M India positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if HMT position performs unexpectedly, 3M India 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 3M India will offset losses from the drop in 3M India's long position.| HMT vs. Cantabil Retail India | HMT vs. Future Retail Limited | HMT vs. Tamilnadu Telecommunication Limited | HMT vs. Baazar Style Retail |
| 3M India vs. Can Fin Homes | 3M India vs. Repco Home Finance | 3M India vs. Iris Clothings Limited | 3M India vs. Karur Vysya Bank |
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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
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