Correlation Between ITI and Arvind Fashions
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By analyzing existing cross correlation between ITI Limited and Arvind Fashions Limited, you can compare the effects of market volatilities on ITI and Arvind Fashions 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 ITI with a short position of Arvind Fashions. Check out your portfolio center. Please also check ongoing floating volatility patterns of ITI and Arvind Fashions.
Diversification Opportunities for ITI and Arvind Fashions
-0.4 | Correlation Coefficient |
Very good diversification
The 3 months correlation between ITI and Arvind is -0.4. Overlapping area represents the amount of risk that can be diversified away by holding ITI Limited and Arvind Fashions Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Arvind Fashions and ITI 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 ITI Limited are associated (or correlated) with Arvind Fashions. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Arvind Fashions has no effect on the direction of ITI i.e., ITI and Arvind Fashions go up and down completely randomly.
Pair Corralation between ITI and Arvind Fashions
Assuming the 90 days trading horizon ITI Limited is expected to generate 1.93 times more return on investment than Arvind Fashions. However, ITI is 1.93 times more volatile than Arvind Fashions Limited. It trades about 0.06 of its potential returns per unit of risk. Arvind Fashions Limited is currently generating about 0.05 per unit of risk. If you would invest 30,745 in ITI Limited on September 14, 2024 and sell it today you would earn a total of 5,800 from holding ITI Limited or generate 18.86% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 99.2% |
| Values | Daily Returns |
ITI Limited vs. Arvind Fashions Limited
Performance |
| Timeline |
| ITI Limited |
| Arvind Fashions |
ITI and Arvind Fashions Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ITI and Arvind Fashions
The main advantage of trading using opposite ITI and Arvind Fashions positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ITI position performs unexpectedly, Arvind Fashions 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 Arvind Fashions will offset losses from the drop in Arvind Fashions' long position.The idea behind ITI Limited and Arvind Fashions Limited pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| Arvind Fashions vs. KIOCL Limited | Arvind Fashions vs. Spentex Industries Limited | Arvind Fashions vs. Punjab Sind Bank | Arvind Fashions vs. ITI 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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
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