Correlation Between MRF and Central Bank
Specify exactly 2 symbols:
By analyzing existing cross correlation between MRF Limited and Central Bank of, you can compare the effects of market volatilities on MRF and Central 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 MRF with a short position of Central Bank. Check out your portfolio center. Please also check ongoing floating volatility patterns of MRF and Central Bank.
Diversification Opportunities for MRF and Central Bank
0.77 | Correlation Coefficient |
Poor diversification
The 3 months correlation between MRF and Central is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding MRF Limited and Central Bank of in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Central Bank and MRF 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 MRF Limited are associated (or correlated) with Central Bank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Central Bank has no effect on the direction of MRF i.e., MRF and Central Bank go up and down completely randomly.
Pair Corralation between MRF and Central Bank
Assuming the 90 days trading horizon MRF is expected to generate 7.84 times less return on investment than Central Bank. But when comparing it to its historical volatility, MRF Limited is 2.55 times less risky than Central Bank. It trades about 0.04 of its potential returns per unit of risk. Central Bank of is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest 5,224 in Central Bank of on August 29, 2024 and sell it today you would earn a total of 383.00 from holding Central Bank of or generate 7.33% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
MRF Limited vs. Central Bank of
Performance |
| Timeline |
| MRF Limited |
| Central Bank |
MRF and Central Bank Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with MRF and Central Bank
The main advantage of trading using opposite MRF and Central Bank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MRF position performs unexpectedly, Central 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 Central Bank will offset losses from the drop in Central Bank's long position.| MRF vs. Baazar Style Retail | MRF vs. BF Utilities Limited | MRF vs. GM Breweries Limited | MRF vs. United Breweries Limited |
| Central Bank vs. MRF Limited | Central Bank vs. Nalwa Sons Investments | Central Bank vs. Kalyani Investment | Central Bank vs. Vardhman Holdings 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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
Other Complementary Tools
| Portfolio Diagnostics Use generated alerts and portfolio events aggregator to diagnose current holdings | |
| FinTech Suite Use AI to screen and filter profitable investment opportunities | |
| Cryptocurrency Center Build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency | |
| ETF Categories List of ETF categories grouped based on various criteria, such as the investment strategy or type of investments | |
| Pair Correlation Compare performance and examine fundamental relationship between any two equity instruments |