Correlation Between Megastar Foods and JSW Steel
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By analyzing existing cross correlation between Megastar Foods Limited and JSW Steel Limited, you can compare the effects of market volatilities on Megastar Foods and JSW Steel 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 JSW Steel. Check out your portfolio center. Please also check ongoing floating volatility patterns of Megastar Foods and JSW Steel.
Diversification Opportunities for Megastar Foods and JSW Steel
-0.29 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Megastar and JSW is -0.29. Overlapping area represents the amount of risk that can be diversified away by holding Megastar Foods Limited and JSW Steel Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on JSW Steel 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 JSW Steel. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of JSW Steel Limited has no effect on the direction of Megastar Foods i.e., Megastar Foods and JSW Steel go up and down completely randomly.
Pair Corralation between Megastar Foods and JSW Steel
Assuming the 90 days trading horizon Megastar Foods Limited is expected to generate 3.48 times more return on investment than JSW Steel. However, Megastar Foods is 3.48 times more volatile than JSW Steel Limited. It trades about 0.14 of its potential returns per unit of risk. JSW Steel Limited is currently generating about -0.23 per unit of risk. If you would invest 23,444 in Megastar Foods Limited on October 18, 2024 and sell it today you would earn a total of 2,696 from holding Megastar Foods Limited or generate 11.5% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.24% |
| Values | Daily Returns |
Megastar Foods Limited vs. JSW Steel Limited
Performance |
| Timeline |
| Megastar Foods |
| JSW Steel Limited |
Megastar Foods and JSW Steel Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Megastar Foods and JSW Steel
The main advantage of trading using opposite Megastar Foods and JSW Steel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Megastar Foods position performs unexpectedly, JSW Steel 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 JSW Steel will offset losses from the drop in JSW Steel's long position.| Megastar Foods vs. Cantabil Retail India | Megastar Foods vs. AUTHUM INVESTMENT INFRASTRUCTU | Megastar Foods vs. SIL Investments Limited | Megastar Foods vs. Silgo Retail Limited |
| JSW Steel vs. Foods Inns Limited | JSW Steel vs. Megastar Foods Limited | JSW Steel vs. Apex Frozen Foods | JSW Steel vs. Kohinoor 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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
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