Correlation Between WESTLIFE FOODWORLD and RHI MAGNESITA
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By analyzing existing cross correlation between WESTLIFE FOODWORLD LIMITED and RHI MAGNESITA INDIA, you can compare the effects of market volatilities on WESTLIFE FOODWORLD and RHI MAGNESITA 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 RHI MAGNESITA. Check out your portfolio center. Please also check ongoing floating volatility patterns of WESTLIFE FOODWORLD and RHI MAGNESITA.
Diversification Opportunities for WESTLIFE FOODWORLD and RHI MAGNESITA
0.65 | Correlation Coefficient |
Poor diversification
The 3 months correlation between WESTLIFE and RHI is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding WESTLIFE FOODWORLD LIMITED and RHI MAGNESITA INDIA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on RHI MAGNESITA INDIA 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 RHI MAGNESITA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of RHI MAGNESITA INDIA has no effect on the direction of WESTLIFE FOODWORLD i.e., WESTLIFE FOODWORLD and RHI MAGNESITA go up and down completely randomly.
Pair Corralation between WESTLIFE FOODWORLD and RHI MAGNESITA
Assuming the 90 days trading horizon WESTLIFE FOODWORLD LIMITED is expected to generate 1.07 times more return on investment than RHI MAGNESITA. However, WESTLIFE FOODWORLD is 1.07 times more volatile than RHI MAGNESITA INDIA. It trades about 0.01 of its potential returns per unit of risk. RHI MAGNESITA INDIA is currently generating about -0.04 per unit of risk. If you would invest 68,800 in WESTLIFE FOODWORLD LIMITED on December 11, 2024 and sell it today you would earn a total of 1,140 from holding WESTLIFE FOODWORLD LIMITED or generate 1.66% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
WESTLIFE FOODWORLD LIMITED vs. RHI MAGNESITA INDIA
Performance |
| Timeline |
| WESTLIFE FOODWORLD |
| RHI MAGNESITA INDIA |
WESTLIFE FOODWORLD and RHI MAGNESITA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with WESTLIFE FOODWORLD and RHI MAGNESITA
The main advantage of trading using opposite WESTLIFE FOODWORLD and RHI MAGNESITA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if WESTLIFE FOODWORLD position performs unexpectedly, RHI MAGNESITA 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 RHI MAGNESITA will offset losses from the drop in RHI MAGNESITA's long position.| WESTLIFE FOODWORLD vs. LT Technology Services | WESTLIFE FOODWORLD vs. Kaynes Technology India | WESTLIFE FOODWORLD vs. Dev Information Technology | WESTLIFE FOODWORLD vs. Tera Software Limited |
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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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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