Correlation Between National Foods and Mughal Iron
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By analyzing existing cross correlation between National Foods and Mughal Iron Steel, you can compare the effects of market volatilities on National Foods and Mughal Iron 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 National Foods with a short position of Mughal Iron. Check out your portfolio center. Please also check ongoing floating volatility patterns of National Foods and Mughal Iron.
Diversification Opportunities for National Foods and Mughal Iron
0.56 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between National and Mughal is 0.56. Overlapping area represents the amount of risk that can be diversified away by holding National Foods and Mughal Iron Steel in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mughal Iron Steel and National Foods 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 National Foods are associated (or correlated) with Mughal Iron. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mughal Iron Steel has no effect on the direction of National Foods i.e., National Foods and Mughal Iron go up and down completely randomly.
Pair Corralation between National Foods and Mughal Iron
Assuming the 90 days trading horizon National Foods is expected to generate 0.54 times more return on investment than Mughal Iron. However, National Foods is 1.85 times less risky than Mughal Iron. It trades about 0.1 of its potential returns per unit of risk. Mughal Iron Steel is currently generating about 0.01 per unit of risk. If you would invest 16,814 in National Foods on October 25, 2024 and sell it today you would earn a total of 1,770 from holding National Foods or generate 10.53% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 98.41% |
| Values | Daily Returns |
National Foods vs. Mughal Iron Steel
Performance |
| Timeline |
| National Foods |
| Mughal Iron Steel |
National Foods and Mughal Iron Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with National Foods and Mughal Iron
The main advantage of trading using opposite National Foods and Mughal Iron positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if National Foods position performs unexpectedly, Mughal Iron 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 Mughal Iron will offset losses from the drop in Mughal Iron's long position.| National Foods vs. Mughal Iron Steel | National Foods vs. Fateh Sports Wear | National Foods vs. Orient Rental Modaraba | National Foods vs. Agha Steel Industries |
| Mughal Iron vs. Packages | Mughal Iron vs. Matco Foods | Mughal Iron vs. Fauji Foods | Mughal Iron vs. Quice Food Industries |
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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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