Correlation Between Megastar Foods and Hi Tech
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By analyzing existing cross correlation between Megastar Foods Limited and The Hi Tech Gears, you can compare the effects of market volatilities on Megastar Foods and Hi Tech 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 Hi Tech. Check out your portfolio center. Please also check ongoing floating volatility patterns of Megastar Foods and Hi Tech.
Diversification Opportunities for Megastar Foods and Hi Tech
0.13 | Correlation Coefficient |
Average diversification
The 3 months correlation between Megastar and HITECHGEAR is 0.13. Overlapping area represents the amount of risk that can be diversified away by holding Megastar Foods Limited and The Hi Tech Gears in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hi Tech 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 Hi Tech. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hi Tech has no effect on the direction of Megastar Foods i.e., Megastar Foods and Hi Tech go up and down completely randomly.
Pair Corralation between Megastar Foods and Hi Tech
Assuming the 90 days trading horizon Megastar Foods is expected to generate 6.03 times less return on investment than Hi Tech. But when comparing it to its historical volatility, Megastar Foods Limited is 1.16 times less risky than Hi Tech. It trades about 0.02 of its potential returns per unit of risk. The Hi Tech Gears is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 24,806 in The Hi Tech Gears on October 14, 2024 and sell it today you would earn a total of 54,289 from holding The Hi Tech Gears or generate 218.85% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 99.39% |
| Values | Daily Returns |
Megastar Foods Limited vs. The Hi Tech Gears
Performance |
| Timeline |
| Megastar Foods |
| Hi Tech |
Megastar Foods and Hi Tech Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Megastar Foods and Hi Tech
The main advantage of trading using opposite Megastar Foods and Hi Tech positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Megastar Foods position performs unexpectedly, Hi Tech 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 Hi Tech will offset losses from the drop in Hi Tech's long position.| Megastar Foods vs. Styrenix Performance Materials | Megastar Foods vs. Music Broadcast Limited | Megastar Foods vs. Home First Finance | Megastar Foods vs. One 97 Communications |
| Hi Tech vs. Alkali Metals Limited | Hi Tech vs. GM Breweries Limited | Hi Tech vs. Varun Beverages Limited | Hi Tech 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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
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