Correlation Between Megastar Foods and Punjab National
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By analyzing existing cross correlation between Megastar Foods Limited and Punjab National Bank, you can compare the effects of market volatilities on Megastar Foods and Punjab National 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 Punjab National. Check out your portfolio center. Please also check ongoing floating volatility patterns of Megastar Foods and Punjab National.
Diversification Opportunities for Megastar Foods and Punjab National
0.74 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Megastar and Punjab is 0.74. Overlapping area represents the amount of risk that can be diversified away by holding Megastar Foods Limited and Punjab National Bank in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Punjab National Bank 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 Punjab National. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Punjab National Bank has no effect on the direction of Megastar Foods i.e., Megastar Foods and Punjab National go up and down completely randomly.
Pair Corralation between Megastar Foods and Punjab National
Assuming the 90 days trading horizon Megastar Foods Limited is expected to generate 1.63 times more return on investment than Punjab National. However, Megastar Foods is 1.63 times more volatile than Punjab National Bank. It trades about 0.0 of its potential returns per unit of risk. Punjab National Bank is currently generating about -0.05 per unit of risk. If you would invest 25,265 in Megastar Foods Limited on September 5, 2024 and sell it today you would lose (1,711) from holding Megastar Foods Limited or give up 6.77% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 99.19% |
| Values | Daily Returns |
Megastar Foods Limited vs. Punjab National Bank
Performance |
| Timeline |
| Megastar Foods |
| Punjab National Bank |
Megastar Foods and Punjab National Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Megastar Foods and Punjab National
The main advantage of trading using opposite Megastar Foods and Punjab National positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Megastar Foods position performs unexpectedly, Punjab National 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 Punjab National will offset losses from the drop in Punjab National's 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 |
| Punjab National vs. Tamilnadu Telecommunication Limited | Punjab National vs. Paramount Communications Limited | Punjab National vs. Megastar Foods Limited | Punjab National vs. ADF 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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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