Correlation Between Malu Paper and General Insuranceof
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By analyzing existing cross correlation between Malu Paper Mills and General Insurance, you can compare the effects of market volatilities on Malu Paper and General Insuranceof 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 Malu Paper with a short position of General Insuranceof. Check out your portfolio center. Please also check ongoing floating volatility patterns of Malu Paper and General Insuranceof.
Diversification Opportunities for Malu Paper and General Insuranceof
0.45 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Malu and General is 0.45. Overlapping area represents the amount of risk that can be diversified away by holding Malu Paper Mills and General Insurance in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on General Insuranceof and Malu Paper 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 Malu Paper Mills are associated (or correlated) with General Insuranceof. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of General Insuranceof has no effect on the direction of Malu Paper i.e., Malu Paper and General Insuranceof go up and down completely randomly.
Pair Corralation between Malu Paper and General Insuranceof
Assuming the 90 days trading horizon Malu Paper Mills is expected to under-perform the General Insuranceof. But the stock apears to be less risky and, when comparing its historical volatility, Malu Paper Mills is 1.22 times less risky than General Insuranceof. The stock trades about -0.06 of its potential returns per unit of risk. The General Insurance is currently generating about 0.18 of returns per unit of risk over similar time horizon. If you would invest 36,460 in General Insurance on August 30, 2024 and sell it today you would earn a total of 3,130 from holding General Insurance or generate 8.58% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Malu Paper Mills vs. General Insurance
Performance |
| Timeline |
| Malu Paper Mills |
| General Insuranceof |
Malu Paper and General Insuranceof Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Malu Paper and General Insuranceof
The main advantage of trading using opposite Malu Paper and General Insuranceof positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Malu Paper position performs unexpectedly, General Insuranceof 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 General Insuranceof will offset losses from the drop in General Insuranceof's long position.The idea behind Malu Paper Mills and General Insurance 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.| General Insuranceof vs. The Orissa Minerals | General Insuranceof vs. DSJ Keep Learning | General Insuranceof vs. Malu Paper Mills | General Insuranceof vs. Kingfa Science Technology |
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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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