Correlation Between Prakash Steelage and Meghmani Organics
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By analyzing existing cross correlation between Prakash Steelage Limited and Meghmani Organics Limited, you can compare the effects of market volatilities on Prakash Steelage and Meghmani Organics 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 Prakash Steelage with a short position of Meghmani Organics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Prakash Steelage and Meghmani Organics.
Diversification Opportunities for Prakash Steelage and Meghmani Organics
0.65 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Prakash and Meghmani is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding Prakash Steelage Limited and Meghmani Organics Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Meghmani Organics and Prakash Steelage 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 Prakash Steelage Limited are associated (or correlated) with Meghmani Organics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Meghmani Organics has no effect on the direction of Prakash Steelage i.e., Prakash Steelage and Meghmani Organics go up and down completely randomly.
Pair Corralation between Prakash Steelage and Meghmani Organics
Assuming the 90 days trading horizon Prakash Steelage Limited is expected to generate 1.46 times more return on investment than Meghmani Organics. However, Prakash Steelage is 1.46 times more volatile than Meghmani Organics Limited. It trades about -0.04 of its potential returns per unit of risk. Meghmani Organics Limited is currently generating about -0.09 per unit of risk. If you would invest 864.00 in Prakash Steelage Limited on September 3, 2024 and sell it today you would lose (24.00) from holding Prakash Steelage Limited or give up 2.78% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Prakash Steelage Limited vs. Meghmani Organics Limited
Performance |
| Timeline |
| Prakash Steelage |
| Meghmani Organics |
Prakash Steelage and Meghmani Organics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Prakash Steelage and Meghmani Organics
The main advantage of trading using opposite Prakash Steelage and Meghmani Organics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Prakash Steelage position performs unexpectedly, Meghmani Organics 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 Meghmani Organics will offset losses from the drop in Meghmani Organics' long position.| Prakash Steelage vs. Zenith Steel Pipes | Prakash Steelage vs. Steel Authority of | Prakash Steelage vs. Megastar Foods Limited | Prakash Steelage vs. Electrosteel Castings Limited |
| Meghmani Organics vs. Prakash Steelage Limited | Meghmani Organics vs. Manaksia Steels Limited | Meghmani Organics vs. Fortis Healthcare Limited | Meghmani Organics vs. Sakar Healthcare Limited |
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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
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