Correlation Between MRF and JSW Holdings
Can any of the company-specific risk be diversified away by investing in both MRF and JSW Holdings at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining MRF and JSW Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between MRF Limited and JSW Holdings Limited, you can compare the effects of market volatilities on MRF and JSW Holdings 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 JSW Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of MRF and JSW Holdings.
Diversification Opportunities for MRF and JSW Holdings
-0.72 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between MRF and JSW is -0.72. Overlapping area represents the amount of risk that can be diversified away by holding MRF Limited and JSW Holdings Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on JSW Holdings Limited 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 JSW Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of JSW Holdings Limited has no effect on the direction of MRF i.e., MRF and JSW Holdings go up and down completely randomly.
Pair Corralation between MRF and JSW Holdings
Assuming the 90 days trading horizon MRF is expected to generate 40.36 times less return on investment than JSW Holdings. But when comparing it to its historical volatility, MRF Limited is 6.2 times less risky than JSW Holdings. It trades about 0.04 of its potential returns per unit of risk. JSW Holdings Limited is currently generating about 0.27 of returns per unit of risk over similar time horizon. If you would invest 948,535 in JSW Holdings Limited on August 30, 2024 and sell it today you would earn a total of 439,865 from holding JSW Holdings Limited or generate 46.37% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
MRF Limited vs. JSW Holdings Limited
Performance |
| Timeline |
| MRF Limited |
| JSW Holdings Limited |
MRF and JSW Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with MRF and JSW Holdings
The main advantage of trading using opposite MRF and JSW Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MRF position performs unexpectedly, JSW Holdings 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 JSW Holdings will offset losses from the drop in JSW Holdings' long position.| MRF vs. V Mart Retail Limited | MRF vs. Ortel Communications Limited | MRF vs. Spencers Retail Limited | MRF vs. Silver Touch Technologies |
| JSW Holdings vs. Shree Pushkar Chemicals | JSW Holdings vs. Pondy Oxides Chemicals | JSW Holdings vs. Healthcare Global Enterprises | JSW Holdings vs. TECIL Chemicals and |
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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
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