Correlation Between N B and MRF
Specify exactly 2 symbols:
By analyzing existing cross correlation between N B I and MRF Limited, you can compare the effects of market volatilities on N B and MRF 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 N B with a short position of MRF. Check out your portfolio center. Please also check ongoing floating volatility patterns of N B and MRF.
Diversification Opportunities for N B and MRF
Very good diversification
The 3 months correlation between NBIFIN and MRF is -0.33. Overlapping area represents the amount of risk that can be diversified away by holding N B I and MRF Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MRF Limited and N B 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 N B I are associated (or correlated) with MRF. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MRF Limited has no effect on the direction of N B i.e., N B and MRF go up and down completely randomly.
Pair Corralation between N B and MRF
Assuming the 90 days trading horizon N B I is expected to generate 2.6 times more return on investment than MRF. However, N B is 2.6 times more volatile than MRF Limited. It trades about 0.49 of its potential returns per unit of risk. MRF Limited is currently generating about 0.04 per unit of risk. If you would invest 228,205 in N B I on August 30, 2024 and sell it today you would earn a total of 85,035 from holding N B I or generate 37.26% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
N B I vs. MRF Limited
Performance |
| Timeline |
| N B I |
| MRF Limited |
N B and MRF Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with N B and MRF
The main advantage of trading using opposite N B and MRF positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if N B position performs unexpectedly, MRF 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 MRF will offset losses from the drop in MRF's long position.| N B vs. Alkali Metals Limited | N B vs. Pondy Oxides Chemicals | N B vs. Madhav Copper Limited | N B vs. Compucom Software Limited |
| MRF vs. V Mart Retail Limited | MRF vs. Ortel Communications Limited | MRF vs. Spencers Retail Limited | MRF vs. Silver Touch Technologies |
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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
Other Complementary Tools
| Premium Stories Follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope | |
| Portfolio Backtesting Avoid under-diversification and over-optimization by backtesting your portfolios | |
| Portfolio Optimization Compute new portfolio that will generate highest expected return given your specified tolerance for risk | |
| Pair Correlation Compare performance and examine fundamental relationship between any two equity instruments | |
| Balance Of Power Check stock momentum by analyzing Balance Of Power indicator and other technical ratios |