Correlation Between MMTC and Federal Bank
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By analyzing existing cross correlation between MMTC Limited and The Federal Bank, you can compare the effects of market volatilities on MMTC and Federal Bank 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 MMTC with a short position of Federal Bank. Check out your portfolio center. Please also check ongoing floating volatility patterns of MMTC and Federal Bank.
Diversification Opportunities for MMTC and Federal Bank
0.91 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between MMTC and Federal is 0.91. Overlapping area represents the amount of risk that can be diversified away by holding MMTC Limited and The Federal Bank in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Federal Bank and MMTC 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 MMTC Limited are associated (or correlated) with Federal Bank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Federal Bank has no effect on the direction of MMTC i.e., MMTC and Federal Bank go up and down completely randomly.
Pair Corralation between MMTC and Federal Bank
Assuming the 90 days trading horizon MMTC Limited is expected to generate 2.27 times more return on investment than Federal Bank. However, MMTC is 2.27 times more volatile than The Federal Bank. It trades about 0.05 of its potential returns per unit of risk. The Federal Bank is currently generating about 0.05 per unit of risk. If you would invest 3,195 in MMTC Limited on November 28, 2024 and sell it today you would earn a total of 2,165 from holding MMTC Limited or generate 67.76% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 99.79% |
| Values | Daily Returns |
MMTC Limited vs. The Federal Bank
Performance |
| Timeline |
| MMTC Limited |
| Federal Bank |
MMTC and Federal Bank Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with MMTC and Federal Bank
The main advantage of trading using opposite MMTC and Federal Bank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MMTC position performs unexpectedly, Federal Bank 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 Federal Bank will offset losses from the drop in Federal Bank's long position.| MMTC vs. Chemcon Speciality Chemicals | MMTC vs. DMCC SPECIALITY CHEMICALS | MMTC vs. Manali Petrochemicals Limited | MMTC vs. BF Utilities Limited |
| Federal Bank vs. Manaksia Coated Metals | Federal Bank vs. 21st Century Management | Federal Bank vs. Zota Health Care | Federal Bank vs. Healthcare Global Enterprises |
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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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