Correlation Between Max Financial and CEAT
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By analyzing existing cross correlation between Max Financial Services and CEAT Limited, you can compare the effects of market volatilities on Max Financial and CEAT 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 CEAT. Check out your portfolio center. Please also check ongoing floating volatility patterns of Max Financial and CEAT.
Diversification Opportunities for Max Financial and CEAT
-0.31 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Max and CEAT is -0.31. Overlapping area represents the amount of risk that can be diversified away by holding Max Financial Services and CEAT Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CEAT Limited 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 CEAT. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CEAT Limited has no effect on the direction of Max Financial i.e., Max Financial and CEAT go up and down completely randomly.
Pair Corralation between Max Financial and CEAT
Assuming the 90 days trading horizon Max Financial Services is expected to under-perform the CEAT. But the stock apears to be less risky and, when comparing its historical volatility, Max Financial Services is 1.19 times less risky than CEAT. The stock trades about -0.2 of its potential returns per unit of risk. The CEAT Limited is currently generating about 0.17 of returns per unit of risk over similar time horizon. If you would invest 277,485 in CEAT Limited on August 30, 2024 and sell it today you would earn a total of 19,910 from holding CEAT Limited or generate 7.18% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.45% |
| Values | Daily Returns |
Max Financial Services vs. CEAT Limited
Performance |
| Timeline |
| Max Financial Services |
| CEAT Limited |
Max Financial and CEAT Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Max Financial and CEAT
The main advantage of trading using opposite Max Financial and CEAT positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Max Financial position performs unexpectedly, CEAT 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 CEAT will offset losses from the drop in CEAT's long position.| Max Financial vs. JM Financial Limited | Max Financial vs. Vertoz Advertising Limited | Max Financial vs. Tamilnadu Telecommunication Limited | Max Financial vs. Tata Communications Limited |
| CEAT vs. Pondy Oxides Chemicals | CEAT vs. Tata Chemicals Limited | CEAT vs. Shree Pushkar Chemicals | CEAT vs. Ortel Communications 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 CEOs Directory module to screen CEOs from public companies around the world.
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