Correlation Between Steel Authority and Bikaji Foods
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By analyzing existing cross correlation between Steel Authority of and Bikaji Foods International, you can compare the effects of market volatilities on Steel Authority and Bikaji Foods 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 Steel Authority with a short position of Bikaji Foods. Check out your portfolio center. Please also check ongoing floating volatility patterns of Steel Authority and Bikaji Foods.
Diversification Opportunities for Steel Authority and Bikaji Foods
0.22 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Steel and Bikaji is 0.22. Overlapping area represents the amount of risk that can be diversified away by holding Steel Authority of and Bikaji Foods International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bikaji Foods Interna and Steel Authority 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 Steel Authority of are associated (or correlated) with Bikaji Foods. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bikaji Foods Interna has no effect on the direction of Steel Authority i.e., Steel Authority and Bikaji Foods go up and down completely randomly.
Pair Corralation between Steel Authority and Bikaji Foods
Assuming the 90 days trading horizon Steel Authority of is expected to generate 1.06 times more return on investment than Bikaji Foods. However, Steel Authority is 1.06 times more volatile than Bikaji Foods International. It trades about -0.34 of its potential returns per unit of risk. Bikaji Foods International is currently generating about -0.45 per unit of risk. If you would invest 12,681 in Steel Authority of on October 11, 2024 and sell it today you would lose (1,705) from holding Steel Authority of or give up 13.45% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
Steel Authority of vs. Bikaji Foods International
Performance |
| Timeline |
| Steel Authority |
| Bikaji Foods Interna |
Steel Authority and Bikaji Foods Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Steel Authority and Bikaji Foods
The main advantage of trading using opposite Steel Authority and Bikaji Foods positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Steel Authority position performs unexpectedly, Bikaji Foods 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 Bikaji Foods will offset losses from the drop in Bikaji Foods' long position.| Steel Authority vs. Univa Foods Limited | Steel Authority vs. Apollo Hospitals Enterprise | Steel Authority vs. Bajaj Healthcare Limited | Steel Authority vs. Fortis Healthcare Limited |
| Bikaji Foods vs. LT Foods Limited | Bikaji Foods vs. Varun Beverages Limited | Bikaji Foods vs. Dodla Dairy Limited | Bikaji Foods vs. Som Distilleries Breweries |
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 Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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