Correlation Between Megastar Foods and BF Utilities
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By analyzing existing cross correlation between Megastar Foods Limited and BF Utilities Limited, you can compare the effects of market volatilities on Megastar Foods and BF Utilities 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 Megastar Foods with a short position of BF Utilities. Check out your portfolio center. Please also check ongoing floating volatility patterns of Megastar Foods and BF Utilities.
Diversification Opportunities for Megastar Foods and BF Utilities
-0.36 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Megastar and BFUTILITIE is -0.36. Overlapping area represents the amount of risk that can be diversified away by holding Megastar Foods Limited and BF Utilities Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BF Utilities Limited and Megastar Foods 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 Megastar Foods Limited are associated (or correlated) with BF Utilities. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BF Utilities Limited has no effect on the direction of Megastar Foods i.e., Megastar Foods and BF Utilities go up and down completely randomly.
Pair Corralation between Megastar Foods and BF Utilities
Assuming the 90 days trading horizon Megastar Foods Limited is expected to under-perform the BF Utilities. But the stock apears to be less risky and, when comparing its historical volatility, Megastar Foods Limited is 1.14 times less risky than BF Utilities. The stock trades about -0.03 of its potential returns per unit of risk. The BF Utilities Limited is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 81,995 in BF Utilities Limited on October 26, 2024 and sell it today you would earn a total of 2,610 from holding BF Utilities Limited or generate 3.18% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Megastar Foods Limited vs. BF Utilities Limited
Performance |
| Timeline |
| Megastar Foods |
| BF Utilities Limited |
Megastar Foods and BF Utilities Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Megastar Foods and BF Utilities
The main advantage of trading using opposite Megastar Foods and BF Utilities positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Megastar Foods position performs unexpectedly, BF Utilities 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 BF Utilities will offset losses from the drop in BF Utilities' long position.| Megastar Foods vs. SBI Life Insurance | Megastar Foods vs. HDFC Life Insurance | Megastar Foods vs. Procter Gamble Health | Megastar Foods vs. Blue Jet Healthcare |
| BF Utilities vs. Bikaji Foods International | BF Utilities vs. Data Patterns Limited | BF Utilities vs. IOL Chemicals and | BF Utilities vs. Megastar Foods 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 Global Correlations module to find global opportunities by holding instruments from different markets.
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