Correlation Between Bikaji Foods and Sumitomo Chemical
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By analyzing existing cross correlation between Bikaji Foods International and Sumitomo Chemical India, you can compare the effects of market volatilities on Bikaji Foods and Sumitomo Chemical 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 Bikaji Foods with a short position of Sumitomo Chemical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bikaji Foods and Sumitomo Chemical.
Diversification Opportunities for Bikaji Foods and Sumitomo Chemical
0.72 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Bikaji and Sumitomo is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding Bikaji Foods International and Sumitomo Chemical India in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sumitomo Chemical India and Bikaji 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 Bikaji Foods International are associated (or correlated) with Sumitomo Chemical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sumitomo Chemical India has no effect on the direction of Bikaji Foods i.e., Bikaji Foods and Sumitomo Chemical go up and down completely randomly.
Pair Corralation between Bikaji Foods and Sumitomo Chemical
Assuming the 90 days trading horizon Bikaji Foods International is expected to generate 0.96 times more return on investment than Sumitomo Chemical. However, Bikaji Foods International is 1.04 times less risky than Sumitomo Chemical. It trades about -0.12 of its potential returns per unit of risk. Sumitomo Chemical India is currently generating about -0.17 per unit of risk. If you would invest 76,930 in Bikaji Foods International on October 26, 2024 and sell it today you would lose (7,615) from holding Bikaji Foods International or give up 9.9% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bikaji Foods International vs. Sumitomo Chemical India
Performance |
| Timeline |
| Bikaji Foods Interna |
| Sumitomo Chemical India |
Bikaji Foods and Sumitomo Chemical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bikaji Foods and Sumitomo Chemical
The main advantage of trading using opposite Bikaji Foods and Sumitomo Chemical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bikaji Foods position performs unexpectedly, Sumitomo Chemical 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 Sumitomo Chemical will offset losses from the drop in Sumitomo Chemical's long position.| Bikaji Foods vs. Gangotri Textiles Limited | Bikaji Foods vs. Hemisphere Properties India | Bikaji Foods vs. Kingfa Science Technology | Bikaji Foods vs. Rico Auto 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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
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