Correlation Between Maithan Alloys and Jindal Steel
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By analyzing existing cross correlation between Maithan Alloys Limited and Jindal Steel Power, you can compare the effects of market volatilities on Maithan Alloys and Jindal Steel 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 Maithan Alloys with a short position of Jindal Steel. Check out your portfolio center. Please also check ongoing floating volatility patterns of Maithan Alloys and Jindal Steel.
Diversification Opportunities for Maithan Alloys and Jindal Steel
0.66 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Maithan and Jindal is 0.66. Overlapping area represents the amount of risk that can be diversified away by holding Maithan Alloys Limited and Jindal Steel Power in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jindal Steel Power and Maithan Alloys 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 Maithan Alloys Limited are associated (or correlated) with Jindal Steel. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jindal Steel Power has no effect on the direction of Maithan Alloys i.e., Maithan Alloys and Jindal Steel go up and down completely randomly.
Pair Corralation between Maithan Alloys and Jindal Steel
Assuming the 90 days trading horizon Maithan Alloys is expected to generate 2.21 times less return on investment than Jindal Steel. In addition to that, Maithan Alloys is 1.15 times more volatile than Jindal Steel Power. It trades about 0.02 of its total potential returns per unit of risk. Jindal Steel Power is currently generating about 0.06 per unit of volatility. If you would invest 56,406 in Jindal Steel Power on August 26, 2024 and sell it today you would earn a total of 31,489 from holding Jindal Steel Power or generate 55.83% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 99.19% |
| Values | Daily Returns |
Maithan Alloys Limited vs. Jindal Steel Power
Performance |
| Timeline |
| Maithan Alloys |
| Jindal Steel Power |
Maithan Alloys and Jindal Steel Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Maithan Alloys and Jindal Steel
The main advantage of trading using opposite Maithan Alloys and Jindal Steel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Maithan Alloys position performs unexpectedly, Jindal Steel 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 Steel will offset losses from the drop in Jindal Steel's long position.| Maithan Alloys vs. The Byke Hospitality | Maithan Alloys vs. Touchwood Entertainment Limited | Maithan Alloys vs. Infomedia Press Limited | Maithan Alloys vs. Blue Jet Healthcare |
| Jindal Steel vs. Action Construction Equipment | Jindal Steel vs. Ankit Metal Power | Jindal Steel vs. Man Infraconstruction Limited | Jindal Steel vs. General Insurance |
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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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