Correlation Between Mughal Iron and Big Bird
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By analyzing existing cross correlation between Mughal Iron Steel and Big Bird Foods, you can compare the effects of market volatilities on Mughal Iron and Big Bird 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 Mughal Iron with a short position of Big Bird. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mughal Iron and Big Bird.
Diversification Opportunities for Mughal Iron and Big Bird
-0.5 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Mughal and Big is -0.5. Overlapping area represents the amount of risk that can be diversified away by holding Mughal Iron Steel and Big Bird Foods in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Big Bird Foods and Mughal Iron 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 Mughal Iron Steel are associated (or correlated) with Big Bird. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Big Bird Foods has no effect on the direction of Mughal Iron i.e., Mughal Iron and Big Bird go up and down completely randomly.
Pair Corralation between Mughal Iron and Big Bird
Assuming the 90 days trading horizon Mughal Iron Steel is expected to generate 0.57 times more return on investment than Big Bird. However, Mughal Iron Steel is 1.76 times less risky than Big Bird. It trades about -0.08 of its potential returns per unit of risk. Big Bird Foods is currently generating about -0.41 per unit of risk. If you would invest 8,051 in Mughal Iron Steel on November 7, 2024 and sell it today you would lose (270.00) from holding Mughal Iron Steel or give up 3.35% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Mughal Iron Steel vs. Big Bird Foods
Performance |
| Timeline |
| Mughal Iron Steel |
| Big Bird Foods |
Mughal Iron and Big Bird Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mughal Iron and Big Bird
The main advantage of trading using opposite Mughal Iron and Big Bird positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mughal Iron position performs unexpectedly, Big Bird 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 Big Bird will offset losses from the drop in Big Bird's long position.| Mughal Iron vs. National Bank of | Mughal Iron vs. United Bank | Mughal Iron vs. Bank Alfalah | Mughal Iron vs. Allied Bank |
| Big Bird vs. Habib Insurance | Big Bird vs. Ghandhara Automobile | Big Bird vs. Shadab Textile Mills | Big Bird vs. Century Insurance |
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 Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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