Correlation Between Megastar Foods and Patanjali Foods
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By analyzing existing cross correlation between Megastar Foods Limited and Patanjali Foods Limited, you can compare the effects of market volatilities on Megastar Foods and Patanjali Foods 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 Patanjali Foods. Check out your portfolio center. Please also check ongoing floating volatility patterns of Megastar Foods and Patanjali Foods.
Diversification Opportunities for Megastar Foods and Patanjali Foods
0.41 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Megastar and Patanjali is 0.41. Overlapping area represents the amount of risk that can be diversified away by holding Megastar Foods Limited and Patanjali Foods Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Patanjali Foods 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 Patanjali Foods. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Patanjali Foods has no effect on the direction of Megastar Foods i.e., Megastar Foods and Patanjali Foods go up and down completely randomly.
Pair Corralation between Megastar Foods and Patanjali Foods
Assuming the 90 days trading horizon Megastar Foods Limited is expected to under-perform the Patanjali Foods. In addition to that, Megastar Foods is 1.25 times more volatile than Patanjali Foods Limited. It trades about -0.01 of its total potential returns per unit of risk. Patanjali Foods Limited is currently generating about 0.08 per unit of volatility. If you would invest 141,562 in Patanjali Foods Limited on August 29, 2024 and sell it today you would earn a total of 33,678 from holding Patanjali Foods Limited or generate 23.79% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Megastar Foods Limited vs. Patanjali Foods Limited
Performance |
| Timeline |
| Megastar Foods |
| Patanjali Foods |
Megastar Foods and Patanjali Foods Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Megastar Foods and Patanjali Foods
The main advantage of trading using opposite Megastar Foods and Patanjali Foods positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Megastar Foods position performs unexpectedly, Patanjali Foods 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 Patanjali Foods will offset losses from the drop in Patanjali Foods' long position.| Megastar Foods vs. Melstar Information Technologies | Megastar Foods vs. Consolidated Construction Consortium | Megastar Foods vs. Biofil Chemicals Pharmaceuticals | Megastar Foods vs. India Glycols 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 Portfolio Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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