Correlation Between Muthoot Finance and Power Finance
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By analyzing existing cross correlation between Muthoot Finance Limited and Power Finance, you can compare the effects of market volatilities on Muthoot Finance and Power Finance 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 Muthoot Finance with a short position of Power Finance. Check out your portfolio center. Please also check ongoing floating volatility patterns of Muthoot Finance and Power Finance.
Diversification Opportunities for Muthoot Finance and Power Finance
0.45 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Muthoot and Power is 0.45. Overlapping area represents the amount of risk that can be diversified away by holding Muthoot Finance Limited and Power Finance in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Power Finance and Muthoot Finance 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 Muthoot Finance Limited are associated (or correlated) with Power Finance. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Power Finance has no effect on the direction of Muthoot Finance i.e., Muthoot Finance and Power Finance go up and down completely randomly.
Pair Corralation between Muthoot Finance and Power Finance
Assuming the 90 days trading horizon Muthoot Finance is expected to generate 1.17 times less return on investment than Power Finance. But when comparing it to its historical volatility, Muthoot Finance Limited is 1.81 times less risky than Power Finance. It trades about 0.08 of its potential returns per unit of risk. Power Finance is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 37,657 in Power Finance on September 4, 2024 and sell it today you would earn a total of 11,918 from holding Power Finance or generate 31.65% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Muthoot Finance Limited vs. Power Finance
Performance |
| Timeline |
| Muthoot Finance |
| Power Finance |
Muthoot Finance and Power Finance Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Muthoot Finance and Power Finance
The main advantage of trading using opposite Muthoot Finance and Power Finance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Muthoot Finance position performs unexpectedly, Power Finance 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 Power Finance will offset losses from the drop in Power Finance's long position.| Muthoot Finance vs. Ratnamani Metals Tubes | Muthoot Finance vs. Jayant Agro Organics | Muthoot Finance vs. LLOYDS METALS AND | Muthoot Finance vs. Manaksia Coated Metals |
| Power Finance vs. Amrutanjan Health Care | Power Finance vs. Hisar Metal Industries | Power Finance vs. Shyam Metalics and | Power Finance vs. Transport of |
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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
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