Correlation Between Max Financial and AU Small
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By analyzing existing cross correlation between Max Financial Services and AU Small Finance, you can compare the effects of market volatilities on Max Financial and AU Small 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 Max Financial with a short position of AU Small. Check out your portfolio center. Please also check ongoing floating volatility patterns of Max Financial and AU Small.
Diversification Opportunities for Max Financial and AU Small
-0.35 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Max and AUBANK is -0.35. Overlapping area represents the amount of risk that can be diversified away by holding Max Financial Services and AU Small Finance in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AU Small Finance and Max Financial 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 Max Financial Services are associated (or correlated) with AU Small. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AU Small Finance has no effect on the direction of Max Financial i.e., Max Financial and AU Small go up and down completely randomly.
Pair Corralation between Max Financial and AU Small
Assuming the 90 days trading horizon Max Financial Services is expected to under-perform the AU Small. In addition to that, Max Financial is 1.18 times more volatile than AU Small Finance. It trades about -0.24 of its total potential returns per unit of risk. AU Small Finance is currently generating about -0.12 per unit of volatility. If you would invest 60,940 in AU Small Finance on August 31, 2024 and sell it today you would lose (2,360) from holding AU Small Finance or give up 3.87% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.45% |
| Values | Daily Returns |
Max Financial Services vs. AU Small Finance
Performance |
| Timeline |
| Max Financial Services |
| AU Small Finance |
Max Financial and AU Small Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Max Financial and AU Small
The main advantage of trading using opposite Max Financial and AU Small positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Max Financial position performs unexpectedly, AU Small 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 AU Small will offset losses from the drop in AU Small's long position.| Max Financial vs. Aarti Drugs Limited | Max Financial vs. Osia Hyper Retail | Max Financial vs. Hathway Cable Datacom | Max Financial vs. Speciality Restaurants Limited |
| AU Small vs. Nalwa Sons Investments | AU Small vs. Tata Investment | AU Small vs. BF Investment Limited | AU Small vs. Kalyani Investment |
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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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