Correlation Between BGrimm Power and Rojana Industrial
Can any of the company-specific risk be diversified away by investing in both BGrimm Power and Rojana Industrial at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining BGrimm Power and Rojana Industrial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between BGrimm Power Public and Rojana Industrial Park, you can compare the effects of market volatilities on BGrimm Power and Rojana Industrial 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 BGrimm Power with a short position of Rojana Industrial. Check out your portfolio center. Please also check ongoing floating volatility patterns of BGrimm Power and Rojana Industrial.
Diversification Opportunities for BGrimm Power and Rojana Industrial
0.4 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between BGrimm and Rojana is 0.4. Overlapping area represents the amount of risk that can be diversified away by holding BGrimm Power Public and Rojana Industrial Park in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Rojana Industrial Park and BGrimm Power 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 BGrimm Power Public are associated (or correlated) with Rojana Industrial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Rojana Industrial Park has no effect on the direction of BGrimm Power i.e., BGrimm Power and Rojana Industrial go up and down completely randomly.
Pair Corralation between BGrimm Power and Rojana Industrial
Assuming the 90 days trading horizon BGrimm Power Public is expected to under-perform the Rojana Industrial. But the stock apears to be less risky and, when comparing its historical volatility, BGrimm Power Public is 1.06 times less risky than Rojana Industrial. The stock trades about -0.06 of its potential returns per unit of risk. The Rojana Industrial Park is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 581.00 in Rojana Industrial Park on August 31, 2024 and sell it today you would earn a total of 49.00 from holding Rojana Industrial Park or generate 8.43% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
BGrimm Power Public vs. Rojana Industrial Park
Performance |
| Timeline |
| BGrimm Power Public |
| Rojana Industrial Park |
BGrimm Power and Rojana Industrial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BGrimm Power and Rojana Industrial
The main advantage of trading using opposite BGrimm Power and Rojana Industrial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BGrimm Power position performs unexpectedly, Rojana Industrial 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 Rojana Industrial will offset losses from the drop in Rojana Industrial's long position.The idea behind BGrimm Power Public and Rojana Industrial Park pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| Rojana Industrial vs. 2S Metal Public | Rojana Industrial vs. Praram 9 Hospital | Rojana Industrial vs. Digital Telecommunications Infrastructure | Rojana Industrial vs. Healthlead Public |
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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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