Correlation Between Bank of Maharashtra and Mindteck
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By analyzing existing cross correlation between Bank of Maharashtra and Mindteck Limited, you can compare the effects of market volatilities on Bank of Maharashtra and Mindteck 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 Mindteck. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bank of Maharashtra and Mindteck.
Diversification Opportunities for Bank of Maharashtra and Mindteck
0.8 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Bank and Mindteck is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding Bank of Maharashtra and Mindteck Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mindteck 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 Mindteck. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mindteck Limited has no effect on the direction of Bank of Maharashtra i.e., Bank of Maharashtra and Mindteck go up and down completely randomly.
Pair Corralation between Bank of Maharashtra and Mindteck
Assuming the 90 days trading horizon Bank of Maharashtra is expected to generate 2.47 times less return on investment than Mindteck. But when comparing it to its historical volatility, Bank of Maharashtra is 3.17 times less risky than Mindteck. It trades about 0.27 of its potential returns per unit of risk. Mindteck Limited is currently generating about 0.21 of returns per unit of risk over similar time horizon. If you would invest 23,955 in Mindteck Limited on September 18, 2024 and sell it today you would earn a total of 4,940 from holding Mindteck Limited or generate 20.62% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bank of Maharashtra vs. Mindteck Limited
Performance |
| Timeline |
| Bank of Maharashtra |
| Mindteck Limited |
Bank of Maharashtra and Mindteck Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bank of Maharashtra and Mindteck
The main advantage of trading using opposite Bank of Maharashtra and Mindteck positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bank of Maharashtra position performs unexpectedly, Mindteck 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 Mindteck will offset losses from the drop in Mindteck's long position.The idea behind Bank of Maharashtra and Mindteck 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.
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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 Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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