Correlation Between Indian Metals and Bikaji Foods
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By analyzing existing cross correlation between Indian Metals Ferro and Bikaji Foods International, you can compare the effects of market volatilities on Indian Metals and Bikaji Foods 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 Indian Metals with a short position of Bikaji Foods. Check out your portfolio center. Please also check ongoing floating volatility patterns of Indian Metals and Bikaji Foods.
Diversification Opportunities for Indian Metals and Bikaji Foods
-0.58 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Indian and Bikaji is -0.58. Overlapping area represents the amount of risk that can be diversified away by holding Indian Metals Ferro and Bikaji Foods International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bikaji Foods Interna and Indian Metals 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 Indian Metals Ferro are associated (or correlated) with Bikaji Foods. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bikaji Foods Interna has no effect on the direction of Indian Metals i.e., Indian Metals and Bikaji Foods go up and down completely randomly.
Pair Corralation between Indian Metals and Bikaji Foods
Assuming the 90 days trading horizon Indian Metals Ferro is expected to generate 1.35 times more return on investment than Bikaji Foods. However, Indian Metals is 1.35 times more volatile than Bikaji Foods International. It trades about -0.11 of its potential returns per unit of risk. Bikaji Foods International is currently generating about -0.46 per unit of risk. If you would invest 96,715 in Indian Metals Ferro on October 11, 2024 and sell it today you would lose (5,990) from holding Indian Metals Ferro or give up 6.19% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 95.24% |
| Values | Daily Returns |
Indian Metals Ferro vs. Bikaji Foods International
Performance |
| Timeline |
| Indian Metals Ferro |
| Bikaji Foods Interna |
Indian Metals and Bikaji Foods Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Indian Metals and Bikaji Foods
The main advantage of trading using opposite Indian Metals and Bikaji Foods positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Indian Metals position performs unexpectedly, Bikaji Foods 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 Bikaji Foods will offset losses from the drop in Bikaji Foods' long position.| Indian Metals vs. Iris Clothings Limited | Indian Metals vs. LT Foods Limited | Indian Metals vs. ADF Foods Limited | Indian Metals vs. Fine Organic Industries |
| Bikaji Foods vs. LT Foods Limited | Bikaji Foods vs. Varun Beverages Limited | Bikaji Foods vs. Dodla Dairy Limited | Bikaji Foods vs. Som Distilleries Breweries |
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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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