Correlation Between Indo Borax and GM Breweries
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By analyzing existing cross correlation between Indo Borax Chemicals and GM Breweries Limited, you can compare the effects of market volatilities on Indo Borax and GM Breweries 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 Indo Borax with a short position of GM Breweries. Check out your portfolio center. Please also check ongoing floating volatility patterns of Indo Borax and GM Breweries.
Diversification Opportunities for Indo Borax and GM Breweries
0.87 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Indo and GMBREW is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding Indo Borax Chemicals and GM Breweries Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GM Breweries Limited and Indo Borax 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 Indo Borax Chemicals are associated (or correlated) with GM Breweries. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GM Breweries Limited has no effect on the direction of Indo Borax i.e., Indo Borax and GM Breweries go up and down completely randomly.
Pair Corralation between Indo Borax and GM Breweries
Assuming the 90 days trading horizon Indo Borax is expected to generate 1.39 times less return on investment than GM Breweries. But when comparing it to its historical volatility, Indo Borax Chemicals is 1.22 times less risky than GM Breweries. It trades about 0.05 of its potential returns per unit of risk. GM Breweries Limited is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 46,053 in GM Breweries Limited on September 12, 2024 and sell it today you would earn a total of 37,312 from holding GM Breweries Limited or generate 81.02% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 99.8% |
| Values | Daily Returns |
Indo Borax Chemicals vs. GM Breweries Limited
Performance |
| Timeline |
| Indo Borax Chemicals |
| GM Breweries Limited |
Indo Borax and GM Breweries Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Indo Borax and GM Breweries
The main advantage of trading using opposite Indo Borax and GM Breweries positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Indo Borax position performs unexpectedly, GM Breweries 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 GM Breweries will offset losses from the drop in GM Breweries' long position.| Indo Borax vs. Steel Authority of | Indo Borax vs. Embassy Office Parks | Indo Borax vs. Indian Metals Ferro | Indo Borax vs. JTL Industries |
| GM Breweries vs. Indo Borax Chemicals | GM Breweries vs. Kingfa Science Technology | GM Breweries vs. Alkali Metals Limited | GM Breweries vs. Krebs Biochemicals and |
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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
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