Correlation Between WESTLIFE FOODWORLD and Golden Tobacco
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By analyzing existing cross correlation between WESTLIFE FOODWORLD LIMITED and Golden Tobacco Limited, you can compare the effects of market volatilities on WESTLIFE FOODWORLD and Golden Tobacco 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 WESTLIFE FOODWORLD with a short position of Golden Tobacco. Check out your portfolio center. Please also check ongoing floating volatility patterns of WESTLIFE FOODWORLD and Golden Tobacco.
Diversification Opportunities for WESTLIFE FOODWORLD and Golden Tobacco
0.56 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between WESTLIFE and Golden is 0.56. Overlapping area represents the amount of risk that can be diversified away by holding WESTLIFE FOODWORLD LIMITED and Golden Tobacco Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Golden Tobacco and WESTLIFE FOODWORLD 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 WESTLIFE FOODWORLD LIMITED are associated (or correlated) with Golden Tobacco. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Golden Tobacco has no effect on the direction of WESTLIFE FOODWORLD i.e., WESTLIFE FOODWORLD and Golden Tobacco go up and down completely randomly.
Pair Corralation between WESTLIFE FOODWORLD and Golden Tobacco
Assuming the 90 days trading horizon WESTLIFE FOODWORLD is expected to generate 1.98 times less return on investment than Golden Tobacco. But when comparing it to its historical volatility, WESTLIFE FOODWORLD LIMITED is 1.06 times less risky than Golden Tobacco. It trades about 0.01 of its potential returns per unit of risk. Golden Tobacco Limited is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest 4,191 in Golden Tobacco Limited on September 12, 2024 and sell it today you would earn a total of 7.00 from holding Golden Tobacco Limited or generate 0.17% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
WESTLIFE FOODWORLD LIMITED vs. Golden Tobacco Limited
Performance |
| Timeline |
| WESTLIFE FOODWORLD |
| Golden Tobacco |
WESTLIFE FOODWORLD and Golden Tobacco Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with WESTLIFE FOODWORLD and Golden Tobacco
The main advantage of trading using opposite WESTLIFE FOODWORLD and Golden Tobacco positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if WESTLIFE FOODWORLD position performs unexpectedly, Golden Tobacco 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 Golden Tobacco will offset losses from the drop in Golden Tobacco's long position.| WESTLIFE FOODWORLD vs. Reliance Industries Limited | WESTLIFE FOODWORLD vs. Tata Consultancy Services | WESTLIFE FOODWORLD vs. HDFC Bank Limited | WESTLIFE FOODWORLD vs. Bharti Airtel Limited |
| Golden Tobacco vs. Network18 Media Investments | Golden Tobacco vs. Tata Investment | Golden Tobacco vs. VIP Clothing Limited | Golden Tobacco vs. AUTHUM INVESTMENT INFRASTRUCTU |
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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
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