Correlation Between Megastar Foods and SBI Life
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By analyzing existing cross correlation between Megastar Foods Limited and SBI Life Insurance, you can compare the effects of market volatilities on Megastar Foods and SBI Life 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 SBI Life. Check out your portfolio center. Please also check ongoing floating volatility patterns of Megastar Foods and SBI Life.
Diversification Opportunities for Megastar Foods and SBI Life
0.19 | Correlation Coefficient |
Average diversification
The 3 months correlation between Megastar and SBI is 0.19. Overlapping area represents the amount of risk that can be diversified away by holding Megastar Foods Limited and SBI Life Insurance in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SBI Life Insurance 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 SBI Life. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SBI Life Insurance has no effect on the direction of Megastar Foods i.e., Megastar Foods and SBI Life go up and down completely randomly.
Pair Corralation between Megastar Foods and SBI Life
Assuming the 90 days trading horizon Megastar Foods is expected to generate 1.15 times less return on investment than SBI Life. In addition to that, Megastar Foods is 2.1 times more volatile than SBI Life Insurance. It trades about 0.02 of its total potential returns per unit of risk. SBI Life Insurance is currently generating about 0.04 per unit of volatility. If you would invest 115,690 in SBI Life Insurance on November 5, 2024 and sell it today you would earn a total of 32,670 from holding SBI Life Insurance or generate 28.24% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 99.8% |
| Values | Daily Returns |
Megastar Foods Limited vs. SBI Life Insurance
Performance |
| Timeline |
| Megastar Foods |
| SBI Life Insurance |
Megastar Foods and SBI Life Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Megastar Foods and SBI Life
The main advantage of trading using opposite Megastar Foods and SBI Life positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Megastar Foods position performs unexpectedly, SBI Life 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 SBI Life will offset losses from the drop in SBI Life's long position.| Megastar Foods vs. Sportking India Limited | Megastar Foods vs. Zee Entertainment Enterprises | Megastar Foods vs. NRB Industrial Bearings | Megastar Foods vs. Hisar Metal Industries |
| SBI Life vs. Gallantt Ispat Limited | SBI Life vs. Fertilizers and Chemicals | SBI Life vs. Indo Rama Synthetics | SBI Life vs. Aarey Drugs Pharmaceuticals |
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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
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