Correlation Between Bodal Chemicals and Southern Petrochemicals
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By analyzing existing cross correlation between Bodal Chemicals Limited and Southern Petrochemicals Industries, you can compare the effects of market volatilities on Bodal Chemicals and Southern Petrochemicals 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 Bodal Chemicals with a short position of Southern Petrochemicals. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bodal Chemicals and Southern Petrochemicals.
Diversification Opportunities for Bodal Chemicals and Southern Petrochemicals
0.87 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Bodal and Southern is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding Bodal Chemicals Limited and Southern Petrochemicals Indust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Southern Petrochemicals and Bodal Chemicals 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 Bodal Chemicals Limited are associated (or correlated) with Southern Petrochemicals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Southern Petrochemicals has no effect on the direction of Bodal Chemicals i.e., Bodal Chemicals and Southern Petrochemicals go up and down completely randomly.
Pair Corralation between Bodal Chemicals and Southern Petrochemicals
Assuming the 90 days trading horizon Bodal Chemicals is expected to generate 2.9 times less return on investment than Southern Petrochemicals. But when comparing it to its historical volatility, Bodal Chemicals Limited is 1.03 times less risky than Southern Petrochemicals. It trades about 0.0 of its potential returns per unit of risk. Southern Petrochemicals Industries is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest 7,382 in Southern Petrochemicals Industries on October 13, 2024 and sell it today you would lose (312.00) from holding Southern Petrochemicals Industries or give up 4.23% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bodal Chemicals Limited vs. Southern Petrochemicals Indust
Performance |
| Timeline |
| Bodal Chemicals |
| Southern Petrochemicals |
Bodal Chemicals and Southern Petrochemicals Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bodal Chemicals and Southern Petrochemicals
The main advantage of trading using opposite Bodal Chemicals and Southern Petrochemicals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bodal Chemicals position performs unexpectedly, Southern Petrochemicals 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 Southern Petrochemicals will offset losses from the drop in Southern Petrochemicals' long position.| Bodal Chemicals vs. Oriental Hotels Limited | Bodal Chemicals vs. Can Fin Homes | Bodal Chemicals vs. Praxis Home Retail | Bodal Chemicals vs. Associated Alcohols Breweries |
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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
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