Correlation Between 3M India and Barbeque Nation
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By analyzing existing cross correlation between 3M India Limited and Barbeque Nation Hospitality, you can compare the effects of market volatilities on 3M India and Barbeque Nation 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 3M India with a short position of Barbeque Nation. Check out your portfolio center. Please also check ongoing floating volatility patterns of 3M India and Barbeque Nation.
Diversification Opportunities for 3M India and Barbeque Nation
0.7 | Correlation Coefficient |
Poor diversification
The 3 months correlation between 3MINDIA and Barbeque is 0.7. Overlapping area represents the amount of risk that can be diversified away by holding 3M India Limited and Barbeque Nation Hospitality in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Barbeque Nation Hosp and 3M India 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 3M India Limited are associated (or correlated) with Barbeque Nation. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Barbeque Nation Hosp has no effect on the direction of 3M India i.e., 3M India and Barbeque Nation go up and down completely randomly.
Pair Corralation between 3M India and Barbeque Nation
Assuming the 90 days trading horizon 3M India Limited is expected to generate 0.89 times more return on investment than Barbeque Nation. However, 3M India Limited is 1.13 times less risky than Barbeque Nation. It trades about -0.13 of its potential returns per unit of risk. Barbeque Nation Hospitality is currently generating about -0.29 per unit of risk. If you would invest 3,522,300 in 3M India Limited on September 24, 2024 and sell it today you would lose (440,915) from holding 3M India Limited or give up 12.52% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Significant |
Accuracy | 100.0% |
Values | Daily Returns |
3M India Limited vs. Barbeque Nation Hospitality
Performance |
Timeline |
3M India Limited |
Barbeque Nation Hosp |
3M India and Barbeque Nation Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with 3M India and Barbeque Nation
The main advantage of trading using opposite 3M India and Barbeque Nation positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if 3M India position performs unexpectedly, Barbeque Nation 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 Barbeque Nation will offset losses from the drop in Barbeque Nation's long position.3M India vs. State Bank of | ||
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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 Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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