Correlation Between Megastar Foods and ITI
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By analyzing existing cross correlation between Megastar Foods Limited and ITI Limited, you can compare the effects of market volatilities on Megastar Foods and ITI 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 ITI. Check out your portfolio center. Please also check ongoing floating volatility patterns of Megastar Foods and ITI.
Diversification Opportunities for Megastar Foods and ITI
0.23 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Megastar and ITI is 0.23. Overlapping area represents the amount of risk that can be diversified away by holding Megastar Foods Limited and ITI Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ITI 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 ITI. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ITI Limited has no effect on the direction of Megastar Foods i.e., Megastar Foods and ITI go up and down completely randomly.
Pair Corralation between Megastar Foods and ITI
Assuming the 90 days trading horizon Megastar Foods Limited is expected to generate 0.56 times more return on investment than ITI. However, Megastar Foods Limited is 1.8 times less risky than ITI. It trades about 0.28 of its potential returns per unit of risk. ITI Limited is currently generating about 0.11 per unit of risk. If you would invest 22,865 in Megastar Foods Limited on October 11, 2024 and sell it today you would earn a total of 6,211 from holding Megastar Foods Limited or generate 27.16% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Megastar Foods Limited vs. ITI Limited
Performance |
| Timeline |
| Megastar Foods |
| ITI Limited |
Megastar Foods and ITI Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Megastar Foods and ITI
The main advantage of trading using opposite Megastar Foods and ITI positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Megastar Foods position performs unexpectedly, ITI 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 ITI will offset losses from the drop in ITI's long position.| Megastar Foods vs. Cantabil Retail India | Megastar Foods vs. IOL Chemicals and | Megastar Foods vs. Silgo Retail Limited | Megastar Foods vs. Mangalore Chemicals Fertilizers |
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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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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