Correlation Between Bank of Maharashtra and Jindal Saw
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By analyzing existing cross correlation between Bank of Maharashtra and Jindal Saw Limited, you can compare the effects of market volatilities on Bank of Maharashtra and Jindal Saw 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 Jindal Saw. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bank of Maharashtra and Jindal Saw.
Diversification Opportunities for Bank of Maharashtra and Jindal Saw
0.61 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Bank and Jindal is 0.61. Overlapping area represents the amount of risk that can be diversified away by holding Bank of Maharashtra and Jindal Saw Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jindal Saw Limited 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 Jindal Saw. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jindal Saw Limited has no effect on the direction of Bank of Maharashtra i.e., Bank of Maharashtra and Jindal Saw go up and down completely randomly.
Pair Corralation between Bank of Maharashtra and Jindal Saw
Assuming the 90 days trading horizon Bank of Maharashtra is expected to generate 1.13 times less return on investment than Jindal Saw. But when comparing it to its historical volatility, Bank of Maharashtra is 1.05 times less risky than Jindal Saw. It trades about 0.17 of its potential returns per unit of risk. Jindal Saw Limited is currently generating about 0.18 of returns per unit of risk over similar time horizon. If you would invest 30,440 in Jindal Saw Limited on September 12, 2024 and sell it today you would earn a total of 2,360 from holding Jindal Saw Limited or generate 7.75% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.45% |
| Values | Daily Returns |
Bank of Maharashtra vs. Jindal Saw Limited
Performance |
| Timeline |
| Bank of Maharashtra |
| Jindal Saw Limited |
Bank of Maharashtra and Jindal Saw Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bank of Maharashtra and Jindal Saw
The main advantage of trading using opposite Bank of Maharashtra and Jindal Saw positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bank of Maharashtra position performs unexpectedly, Jindal Saw 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 Jindal Saw will offset losses from the drop in Jindal Saw's long position.| Bank of Maharashtra vs. Yes Bank Limited | Bank of Maharashtra vs. Indian Oil | Bank of Maharashtra vs. Indo Borax Chemicals | Bank of Maharashtra vs. Kingfa Science Technology |
| Jindal Saw vs. Avonmore Capital Management | Jindal Saw vs. Kalyani Steels Limited | Jindal Saw vs. Computer Age Management | Jindal Saw vs. Music Broadcast 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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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