Correlation Between Kotak Mahindra and MRF
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By analyzing existing cross correlation between Kotak Mahindra Bank and MRF Limited, you can compare the effects of market volatilities on Kotak Mahindra 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 Kotak Mahindra with a short position of MRF. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kotak Mahindra and MRF.
Diversification Opportunities for Kotak Mahindra and MRF
0.71 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Kotak and MRF is 0.71. Overlapping area represents the amount of risk that can be diversified away by holding Kotak Mahindra Bank and MRF Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MRF Limited and Kotak Mahindra 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 Kotak Mahindra Bank 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 Kotak Mahindra i.e., Kotak Mahindra and MRF go up and down completely randomly.
Pair Corralation between Kotak Mahindra and MRF
Assuming the 90 days trading horizon Kotak Mahindra Bank is expected to generate 1.16 times more return on investment than MRF. However, Kotak Mahindra is 1.16 times more volatile than MRF Limited. It trades about 0.01 of its potential returns per unit of risk. MRF Limited is currently generating about -0.14 per unit of risk. If you would invest 178,700 in Kotak Mahindra Bank on August 28, 2024 and sell it today you would earn a total of 375.00 from holding Kotak Mahindra Bank or generate 0.21% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 98.41% |
| Values | Daily Returns |
Kotak Mahindra Bank vs. MRF Limited
Performance |
| Timeline |
| Kotak Mahindra Bank |
| MRF Limited |
Kotak Mahindra and MRF Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kotak Mahindra and MRF
The main advantage of trading using opposite Kotak Mahindra and MRF positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kotak Mahindra 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.| Kotak Mahindra vs. Varun Beverages Limited | Kotak Mahindra vs. DJ Mediaprint Logistics | Kotak Mahindra vs. EMBASSY OFFICE PARKS | Kotak Mahindra vs. VIP Clothing Limited |
| MRF vs. JGCHEMICALS LIMITED | MRF vs. Pilani Investment and | MRF vs. DMCC SPECIALITY CHEMICALS | MRF vs. Tata Investment |
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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
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