Correlation Between MRF and Grasim Industries
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By analyzing existing cross correlation between MRF Limited and Grasim Industries Limited, you can compare the effects of market volatilities on MRF and Grasim Industries 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 Grasim Industries. Check out your portfolio center. Please also check ongoing floating volatility patterns of MRF and Grasim Industries.
Diversification Opportunities for MRF and Grasim Industries
0.75 | Correlation Coefficient |
Poor diversification
The 3 months correlation between MRF and Grasim is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding MRF Limited and Grasim Industries Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Grasim Industries 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 Grasim Industries. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Grasim Industries has no effect on the direction of MRF i.e., MRF and Grasim Industries go up and down completely randomly.
Pair Corralation between MRF and Grasim Industries
Assuming the 90 days trading horizon MRF is expected to generate 1.24 times less return on investment than Grasim Industries. But when comparing it to its historical volatility, MRF Limited is 1.33 times less risky than Grasim Industries. It trades about 0.17 of its potential returns per unit of risk. Grasim Industries Limited is currently generating about 0.15 of returns per unit of risk over similar time horizon. If you would invest 259,060 in Grasim Industries Limited on September 5, 2024 and sell it today you would earn a total of 12,340 from holding Grasim Industries Limited or generate 4.76% 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. Grasim Industries Limited
Performance |
| Timeline |
| MRF Limited |
| Grasim Industries |
MRF and Grasim Industries Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with MRF and Grasim Industries
The main advantage of trading using opposite MRF and Grasim Industries positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MRF position performs unexpectedly, Grasim Industries 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 Grasim Industries will offset losses from the drop in Grasim Industries' long position.| MRF vs. General Insurance | MRF vs. Cantabil Retail India | MRF vs. Sri Havisha Hospitality | MRF vs. The Byke Hospitality |
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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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
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