Correlation Between Renuka Agri and Merchant Bank
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By analyzing existing cross correlation between Renuka Agri Foods and Merchant Bank of, you can compare the effects of market volatilities on Renuka Agri and Merchant Bank 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 Renuka Agri with a short position of Merchant Bank. Check out your portfolio center. Please also check ongoing floating volatility patterns of Renuka Agri and Merchant Bank.
Diversification Opportunities for Renuka Agri and Merchant Bank
0.84 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Renuka and Merchant is 0.84. Overlapping area represents the amount of risk that can be diversified away by holding Renuka Agri Foods and Merchant Bank of in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Merchant Bank and Renuka Agri 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 Renuka Agri Foods are associated (or correlated) with Merchant Bank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Merchant Bank has no effect on the direction of Renuka Agri i.e., Renuka Agri and Merchant Bank go up and down completely randomly.
Pair Corralation between Renuka Agri and Merchant Bank
Assuming the 90 days trading horizon Renuka Agri Foods is expected to generate 0.85 times more return on investment than Merchant Bank. However, Renuka Agri Foods is 1.18 times less risky than Merchant Bank. It trades about 0.01 of its potential returns per unit of risk. Merchant Bank of is currently generating about -0.16 per unit of risk. If you would invest 330.00 in Renuka Agri Foods on August 28, 2024 and sell it today you would earn a total of 0.00 from holding Renuka Agri Foods or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Renuka Agri Foods vs. Merchant Bank of
Performance |
| Timeline |
| Renuka Agri Foods |
| Merchant Bank |
Renuka Agri and Merchant Bank Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Renuka Agri and Merchant Bank
The main advantage of trading using opposite Renuka Agri and Merchant Bank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Renuka Agri position performs unexpectedly, Merchant Bank 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 Merchant Bank will offset losses from the drop in Merchant Bank's long position.| Renuka Agri vs. Keells Food Products | Renuka Agri vs. Peoples Insurance PLC | Renuka Agri vs. Singhe Hospitals | Renuka Agri vs. Asiri Surgical Hospital |
| Merchant Bank vs. Hotel Sigiriya PLC | Merchant Bank vs. SERENDIB HOTELS PLC | Merchant Bank vs. Singhe Hospitals | Merchant Bank vs. Pegasus Hotels 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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
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