Correlation Between Home First and Can Fin
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By analyzing existing cross correlation between Home First Finance and Can Fin Homes, you can compare the effects of market volatilities on Home First and Can Fin 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 Home First with a short position of Can Fin. Check out your portfolio center. Please also check ongoing floating volatility patterns of Home First and Can Fin.
Diversification Opportunities for Home First and Can Fin
0.72 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Home and Can is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding Home First Finance and Can Fin Homes in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Can Fin Homes and Home First 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 Home First Finance are associated (or correlated) with Can Fin. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Can Fin Homes has no effect on the direction of Home First i.e., Home First and Can Fin go up and down completely randomly.
Pair Corralation between Home First and Can Fin
Assuming the 90 days trading horizon Home First Finance is expected to generate 1.08 times more return on investment than Can Fin. However, Home First is 1.08 times more volatile than Can Fin Homes. It trades about -0.34 of its potential returns per unit of risk. Can Fin Homes is currently generating about -0.39 per unit of risk. If you would invest 114,350 in Home First Finance on September 24, 2024 and sell it today you would lose (14,325) from holding Home First Finance or give up 12.53% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Significant |
Accuracy | 100.0% |
Values | Daily Returns |
Home First Finance vs. Can Fin Homes
Performance |
Timeline |
Home First Finance |
Can Fin Homes |
Home First and Can Fin Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Home First and Can Fin
The main advantage of trading using opposite Home First and Can Fin positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Home First position performs unexpectedly, Can Fin 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 Can Fin will offset losses from the drop in Can Fin's long position.Home First vs. Reliance Industries Limited | Home First vs. Oil Natural Gas | Home First vs. Power Finance | Home First vs. Indian Oil |
Can Fin vs. Reliance Industries Limited | Can Fin vs. Oil Natural Gas | Can Fin vs. Power Finance | Can Fin vs. Indian Oil |
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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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