Correlation Between BF Utilities and POWERGRID Infrastructure
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By analyzing existing cross correlation between BF Utilities Limited and POWERGRID Infrastructure Investment, you can compare the effects of market volatilities on BF Utilities and POWERGRID Infrastructure 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 BF Utilities with a short position of POWERGRID Infrastructure. Check out your portfolio center. Please also check ongoing floating volatility patterns of BF Utilities and POWERGRID Infrastructure.
Diversification Opportunities for BF Utilities and POWERGRID Infrastructure
-0.63 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between BFUTILITIE and POWERGRID is -0.63. Overlapping area represents the amount of risk that can be diversified away by holding BF Utilities Limited and POWERGRID Infrastructure Inves in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on POWERGRID Infrastructure and BF Utilities 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 BF Utilities Limited are associated (or correlated) with POWERGRID Infrastructure. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of POWERGRID Infrastructure has no effect on the direction of BF Utilities i.e., BF Utilities and POWERGRID Infrastructure go up and down completely randomly.
Pair Corralation between BF Utilities and POWERGRID Infrastructure
Assuming the 90 days trading horizon BF Utilities Limited is expected to generate 6.36 times more return on investment than POWERGRID Infrastructure. However, BF Utilities is 6.36 times more volatile than POWERGRID Infrastructure Investment. It trades about 0.11 of its potential returns per unit of risk. POWERGRID Infrastructure Investment is currently generating about -0.15 per unit of risk. If you would invest 78,375 in BF Utilities Limited on September 3, 2024 and sell it today you would earn a total of 20,240 from holding BF Utilities Limited or generate 25.82% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Weak |
Accuracy | 98.41% |
Values | Daily Returns |
BF Utilities Limited vs. POWERGRID Infrastructure Inves
Performance |
Timeline |
BF Utilities Limited |
POWERGRID Infrastructure |
BF Utilities and POWERGRID Infrastructure Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with BF Utilities and POWERGRID Infrastructure
The main advantage of trading using opposite BF Utilities and POWERGRID Infrastructure positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BF Utilities position performs unexpectedly, POWERGRID Infrastructure 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 POWERGRID Infrastructure will offset losses from the drop in POWERGRID Infrastructure's long position.BF Utilities vs. Reliance Industries Limited | BF Utilities vs. HDFC Bank Limited | BF Utilities vs. Indo Borax Chemicals | BF Utilities vs. Kingfa Science Technology |
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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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