Correlation Between Bombay Burmah and Gangotri Textiles
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By analyzing existing cross correlation between Bombay Burmah Trading and Gangotri Textiles Limited, you can compare the effects of market volatilities on Bombay Burmah and Gangotri Textiles 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 Gangotri Textiles. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bombay Burmah and Gangotri Textiles.
Diversification Opportunities for Bombay Burmah and Gangotri Textiles
0.32 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Bombay and Gangotri is 0.32. Overlapping area represents the amount of risk that can be diversified away by holding Bombay Burmah Trading and Gangotri Textiles Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gangotri Textiles 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 Gangotri Textiles. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gangotri Textiles has no effect on the direction of Bombay Burmah i.e., Bombay Burmah and Gangotri Textiles go up and down completely randomly.
Pair Corralation between Bombay Burmah and Gangotri Textiles
Assuming the 90 days trading horizon Bombay Burmah Trading is expected to generate 3.3 times more return on investment than Gangotri Textiles. However, Bombay Burmah is 3.3 times more volatile than Gangotri Textiles Limited. It trades about 0.09 of its potential returns per unit of risk. Gangotri Textiles Limited is currently generating about 0.29 per unit of risk. If you would invest 211,460 in Bombay Burmah Trading on October 26, 2024 and sell it today you would earn a total of 11,760 from holding Bombay Burmah Trading or generate 5.56% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bombay Burmah Trading vs. Gangotri Textiles Limited
Performance |
| Timeline |
| Bombay Burmah Trading |
| Gangotri Textiles |
Bombay Burmah and Gangotri Textiles Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bombay Burmah and Gangotri Textiles
The main advantage of trading using opposite Bombay Burmah and Gangotri Textiles positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bombay Burmah position performs unexpectedly, Gangotri Textiles 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 Gangotri Textiles will offset losses from the drop in Gangotri Textiles' long position.| Bombay Burmah vs. Gangotri Textiles Limited | Bombay Burmah vs. Hemisphere Properties India | Bombay Burmah vs. Kingfa Science Technology | Bombay Burmah vs. Rico Auto Industries |
| Gangotri Textiles vs. Sasken Technologies Limited | Gangotri Textiles vs. 63 moons technologies | Gangotri Textiles vs. AVALON TECHNOLOGIES LTD | Gangotri Textiles vs. Dhanuka Agritech Limited |
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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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