Correlation Between Megastar Foods and Computer Age
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By analyzing existing cross correlation between Megastar Foods Limited and Computer Age Management, you can compare the effects of market volatilities on Megastar Foods and Computer Age 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 Computer Age. Check out your portfolio center. Please also check ongoing floating volatility patterns of Megastar Foods and Computer Age.
Diversification Opportunities for Megastar Foods and Computer Age
-0.34 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Megastar and Computer is -0.34. Overlapping area represents the amount of risk that can be diversified away by holding Megastar Foods Limited and Computer Age Management in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Computer Age Management 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 Computer Age. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Computer Age Management has no effect on the direction of Megastar Foods i.e., Megastar Foods and Computer Age go up and down completely randomly.
Pair Corralation between Megastar Foods and Computer Age
Assuming the 90 days trading horizon Megastar Foods Limited is expected to generate 1.5 times more return on investment than Computer Age. However, Megastar Foods is 1.5 times more volatile than Computer Age Management. It trades about 0.04 of its potential returns per unit of risk. Computer Age Management is currently generating about -0.03 per unit of risk. If you would invest 24,375 in Megastar Foods Limited on October 25, 2024 and sell it today you would earn a total of 1,077 from holding Megastar Foods Limited or generate 4.42% 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. Computer Age Management
Performance |
| Timeline |
| Megastar Foods |
| Computer Age Management |
Megastar Foods and Computer Age Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Megastar Foods and Computer Age
The main advantage of trading using opposite Megastar Foods and Computer Age positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Megastar Foods position performs unexpectedly, Computer Age 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 Computer Age will offset losses from the drop in Computer Age's long position.| Megastar Foods vs. MRF Limited | Megastar Foods vs. Bosch Limited | Megastar Foods vs. Bajaj Holdings Investment | Megastar Foods vs. Vardhman Holdings Limited |
| Computer Age vs. Reliance Industries Limited | Computer Age vs. Life Insurance | Computer Age vs. Oil Natural Gas | Computer Age vs. Indo Borax Chemicals |
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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
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