Correlation Between Megastar Foods and Next Mediaworks
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By analyzing existing cross correlation between Megastar Foods Limited and Next Mediaworks Limited, you can compare the effects of market volatilities on Megastar Foods and Next Mediaworks 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 Megastar Foods with a short position of Next Mediaworks. Check out your portfolio center. Please also check ongoing floating volatility patterns of Megastar Foods and Next Mediaworks.
Diversification Opportunities for Megastar Foods and Next Mediaworks
-0.48 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Megastar and Next is -0.48. Overlapping area represents the amount of risk that can be diversified away by holding Megastar Foods Limited and Next Mediaworks Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Next Mediaworks and Megastar Foods 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 Megastar Foods Limited are associated (or correlated) with Next Mediaworks. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Next Mediaworks has no effect on the direction of Megastar Foods i.e., Megastar Foods and Next Mediaworks go up and down completely randomly.
Pair Corralation between Megastar Foods and Next Mediaworks
Assuming the 90 days trading horizon Megastar Foods is expected to generate 2.47 times less return on investment than Next Mediaworks. But when comparing it to its historical volatility, Megastar Foods Limited is 1.26 times less risky than Next Mediaworks. It trades about 0.02 of its potential returns per unit of risk. Next Mediaworks Limited is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 660.00 in Next Mediaworks Limited on September 26, 2024 and sell it today you would earn a total of 164.00 from holding Next Mediaworks Limited or generate 24.85% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Very Weak |
Accuracy | 99.8% |
Values | Daily Returns |
Megastar Foods Limited vs. Next Mediaworks Limited
Performance |
Timeline |
Megastar Foods |
Next Mediaworks |
Megastar Foods and Next Mediaworks Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Megastar Foods and Next Mediaworks
The main advantage of trading using opposite Megastar Foods and Next Mediaworks positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Megastar Foods position performs unexpectedly, Next Mediaworks 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 Next Mediaworks will offset losses from the drop in Next Mediaworks' long position.Megastar Foods vs. Reliance Industries Limited | Megastar Foods vs. State Bank of | Megastar Foods vs. HDFC Bank Limited | Megastar Foods vs. Oil Natural Gas |
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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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
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