Correlation Between Bombay Burmah and AVALON TECHNOLOGIES
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By analyzing existing cross correlation between Bombay Burmah Trading and AVALON TECHNOLOGIES LTD, you can compare the effects of market volatilities on Bombay Burmah and AVALON TECHNOLOGIES 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 Bombay Burmah with a short position of AVALON TECHNOLOGIES. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bombay Burmah and AVALON TECHNOLOGIES.
Diversification Opportunities for Bombay Burmah and AVALON TECHNOLOGIES
-0.6 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Bombay and AVALON is -0.6. Overlapping area represents the amount of risk that can be diversified away by holding Bombay Burmah Trading and AVALON TECHNOLOGIES LTD in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AVALON TECHNOLOGIES LTD and Bombay Burmah 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 Bombay Burmah Trading are associated (or correlated) with AVALON TECHNOLOGIES. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AVALON TECHNOLOGIES LTD has no effect on the direction of Bombay Burmah i.e., Bombay Burmah and AVALON TECHNOLOGIES go up and down completely randomly.
Pair Corralation between Bombay Burmah and AVALON TECHNOLOGIES
Assuming the 90 days trading horizon Bombay Burmah Trading is expected to generate 0.81 times more return on investment than AVALON TECHNOLOGIES. However, Bombay Burmah Trading is 1.24 times less risky than AVALON TECHNOLOGIES. It trades about -0.1 of its potential returns per unit of risk. AVALON TECHNOLOGIES LTD is currently generating about -0.27 per unit of risk. If you would invest 240,585 in Bombay Burmah Trading on October 30, 2024 and sell it today you would lose (30,235) from holding Bombay Burmah Trading or give up 12.57% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bombay Burmah Trading vs. AVALON TECHNOLOGIES LTD
Performance |
| Timeline |
| Bombay Burmah Trading |
| AVALON TECHNOLOGIES LTD |
Bombay Burmah and AVALON TECHNOLOGIES Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bombay Burmah and AVALON TECHNOLOGIES
The main advantage of trading using opposite Bombay Burmah and AVALON TECHNOLOGIES positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bombay Burmah position performs unexpectedly, AVALON TECHNOLOGIES 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 AVALON TECHNOLOGIES will offset losses from the drop in AVALON TECHNOLOGIES's long position.| Bombay Burmah vs. Dharani SugarsChemicals Limited | Bombay Burmah vs. Gokul Refoils and | Bombay Burmah vs. Manaksia Coated Metals | Bombay Burmah vs. Sudarshan Chemical Industries |
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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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
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