Correlation Between S P and BF Utilities
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By analyzing existing cross correlation between S P Apparels and BF Utilities Limited, you can compare the effects of market volatilities on S P and BF Utilities 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 S P with a short position of BF Utilities. Check out your portfolio center. Please also check ongoing floating volatility patterns of S P and BF Utilities.
Diversification Opportunities for S P and BF Utilities
-0.4 | Correlation Coefficient |
Very good diversification
The 3 months correlation between SPAL and BFUTILITIE is -0.4. Overlapping area represents the amount of risk that can be diversified away by holding S P Apparels and BF Utilities Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BF Utilities Limited and S P 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 S P Apparels are associated (or correlated) with BF Utilities. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BF Utilities Limited has no effect on the direction of S P i.e., S P and BF Utilities go up and down completely randomly.
Pair Corralation between S P and BF Utilities
Assuming the 90 days trading horizon S P is expected to generate 1.05 times less return on investment than BF Utilities. But when comparing it to its historical volatility, S P Apparels is 1.14 times less risky than BF Utilities. It trades about 0.08 of its potential returns per unit of risk. BF Utilities Limited is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 40,950 in BF Utilities Limited on September 2, 2024 and sell it today you would earn a total of 57,665 from holding BF Utilities Limited or generate 140.82% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 99.8% |
| Values | Daily Returns |
S P Apparels vs. BF Utilities Limited
Performance |
| Timeline |
| S P Apparels |
| BF Utilities Limited |
S P and BF Utilities Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with S P and BF Utilities
The main advantage of trading using opposite S P and BF Utilities positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if S P position performs unexpectedly, BF Utilities 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 BF Utilities will offset losses from the drop in BF Utilities' long position.The idea behind S P Apparels and BF Utilities Limited pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| BF Utilities vs. Dev Information Technology | BF Utilities vs. The Federal Bank | BF Utilities vs. Hemisphere Properties India | BF Utilities vs. Geojit Financial Services |
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 Equity Valuation module to check real value of public entities based on technical and fundamental data.
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