Correlation Between Melstar Information and GTL
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By analyzing existing cross correlation between Melstar Information Technologies and GTL Limited, you can compare the effects of market volatilities on Melstar Information and GTL 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 Melstar Information with a short position of GTL. Check out your portfolio center. Please also check ongoing floating volatility patterns of Melstar Information and GTL.
Diversification Opportunities for Melstar Information and GTL
0.32 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Melstar and GTL is 0.32. Overlapping area represents the amount of risk that can be diversified away by holding Melstar Information Technologi and GTL Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GTL Limited and Melstar Information 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 Melstar Information Technologies are associated (or correlated) with GTL. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GTL Limited has no effect on the direction of Melstar Information i.e., Melstar Information and GTL go up and down completely randomly.
Pair Corralation between Melstar Information and GTL
Assuming the 90 days trading horizon Melstar Information Technologies is expected to generate 15.43 times more return on investment than GTL. However, Melstar Information is 15.43 times more volatile than GTL Limited. It trades about 0.06 of its potential returns per unit of risk. GTL Limited is currently generating about 0.04 per unit of risk. If you would invest 235.00 in Melstar Information Technologies on September 2, 2024 and sell it today you would earn a total of 190.00 from holding Melstar Information Technologies or generate 80.85% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 98.77% |
| Values | Daily Returns |
Melstar Information Technologi vs. GTL Limited
Performance |
| Timeline |
| Melstar Information |
| GTL Limited |
Melstar Information and GTL Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Melstar Information and GTL
The main advantage of trading using opposite Melstar Information and GTL positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Melstar Information position performs unexpectedly, GTL 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 GTL will offset losses from the drop in GTL's long position.The idea behind Melstar Information Technologies and GTL Limited pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
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