Correlation Between Megastar Foods and Persistent Systems
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By analyzing existing cross correlation between Megastar Foods Limited and Persistent Systems Limited, you can compare the effects of market volatilities on Megastar Foods and Persistent Systems 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 Persistent Systems. Check out your portfolio center. Please also check ongoing floating volatility patterns of Megastar Foods and Persistent Systems.
Diversification Opportunities for Megastar Foods and Persistent Systems
-0.6 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Megastar and Persistent is -0.6. Overlapping area represents the amount of risk that can be diversified away by holding Megastar Foods Limited and Persistent Systems Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Persistent Systems 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 Persistent Systems. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Persistent Systems has no effect on the direction of Megastar Foods i.e., Megastar Foods and Persistent Systems go up and down completely randomly.
Pair Corralation between Megastar Foods and Persistent Systems
Assuming the 90 days trading horizon Megastar Foods Limited is expected to under-perform the Persistent Systems. In addition to that, Megastar Foods is 1.06 times more volatile than Persistent Systems Limited. It trades about -0.09 of its total potential returns per unit of risk. Persistent Systems Limited is currently generating about 0.38 per unit of volatility. If you would invest 536,000 in Persistent Systems Limited on September 5, 2024 and sell it today you would earn a total of 68,130 from holding Persistent Systems Limited or generate 12.71% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 90.91% |
| Values | Daily Returns |
Megastar Foods Limited vs. Persistent Systems Limited
Performance |
| Timeline |
| Megastar Foods |
| Persistent Systems |
Megastar Foods and Persistent Systems Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Megastar Foods and Persistent Systems
The main advantage of trading using opposite Megastar Foods and Persistent Systems positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Megastar Foods position performs unexpectedly, Persistent Systems 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 Persistent Systems will offset losses from the drop in Persistent Systems' long position.| Megastar Foods vs. Dev Information Technology | Megastar Foods vs. Varun Beverages Limited | Megastar Foods vs. Kavveri Telecom Products | Megastar Foods vs. Som Distilleries Breweries |
| Persistent Systems vs. Apex Frozen Foods | Persistent Systems vs. Megastar Foods Limited | Persistent Systems vs. Cantabil Retail India | Persistent Systems vs. Cartrade Tech 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 Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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