Correlation Between Bank of Maharashtra and Indian Metals
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By analyzing existing cross correlation between Bank of Maharashtra and Indian Metals Ferro, you can compare the effects of market volatilities on Bank of Maharashtra and Indian Metals 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 Bank of Maharashtra with a short position of Indian Metals. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bank of Maharashtra and Indian Metals.
Diversification Opportunities for Bank of Maharashtra and Indian Metals
-0.35 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Bank and Indian is -0.35. Overlapping area represents the amount of risk that can be diversified away by holding Bank of Maharashtra and Indian Metals Ferro in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Indian Metals Ferro and Bank of Maharashtra 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 Bank of Maharashtra are associated (or correlated) with Indian Metals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Indian Metals Ferro has no effect on the direction of Bank of Maharashtra i.e., Bank of Maharashtra and Indian Metals go up and down completely randomly.
Pair Corralation between Bank of Maharashtra and Indian Metals
Assuming the 90 days trading horizon Bank of Maharashtra is expected to generate 1.9 times less return on investment than Indian Metals. But when comparing it to its historical volatility, Bank of Maharashtra is 1.07 times less risky than Indian Metals. It trades about 0.06 of its potential returns per unit of risk. Indian Metals Ferro is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest 23,125 in Indian Metals Ferro on September 4, 2024 and sell it today you would earn a total of 64,110 from holding Indian Metals Ferro or generate 277.23% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.8% |
| Values | Daily Returns |
Bank of Maharashtra vs. Indian Metals Ferro
Performance |
| Timeline |
| Bank of Maharashtra |
| Indian Metals Ferro |
Bank of Maharashtra and Indian Metals Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bank of Maharashtra and Indian Metals
The main advantage of trading using opposite Bank of Maharashtra and Indian Metals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bank of Maharashtra position performs unexpectedly, Indian Metals 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 Indian Metals will offset losses from the drop in Indian Metals' long position.| Bank of Maharashtra vs. Indian Metals Ferro | Bank of Maharashtra vs. Sarthak Metals Limited | Bank of Maharashtra vs. Ratnamani Metals Tubes | Bank of Maharashtra vs. Transport of |
| Indian Metals vs. NMDC Limited | Indian Metals vs. Steel Authority of | Indian Metals vs. Embassy Office Parks | Indian Metals vs. Gujarat Narmada Valley |
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 Portfolio Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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