Correlation Between Bodhi Tree and Entertainment Network
Can any of the company-specific risk be diversified away by investing in both Bodhi Tree and Entertainment Network 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 Bodhi Tree and Entertainment Network into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Bodhi Tree Multimedia and Entertainment Network Limited, you can compare the effects of market volatilities on Bodhi Tree and Entertainment Network 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 Bodhi Tree with a short position of Entertainment Network. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bodhi Tree and Entertainment Network.
Diversification Opportunities for Bodhi Tree and Entertainment Network
0.46 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Bodhi and Entertainment is 0.46. Overlapping area represents the amount of risk that can be diversified away by holding Bodhi Tree Multimedia and Entertainment Network Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Entertainment Network and Bodhi Tree 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 Bodhi Tree Multimedia are associated (or correlated) with Entertainment Network. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Entertainment Network has no effect on the direction of Bodhi Tree i.e., Bodhi Tree and Entertainment Network go up and down completely randomly.
Pair Corralation between Bodhi Tree and Entertainment Network
Assuming the 90 days trading horizon Bodhi Tree Multimedia is expected to generate 1.53 times more return on investment than Entertainment Network. However, Bodhi Tree is 1.53 times more volatile than Entertainment Network Limited. It trades about 0.03 of its potential returns per unit of risk. Entertainment Network Limited is currently generating about -0.09 per unit of risk. If you would invest 1,199 in Bodhi Tree Multimedia on September 2, 2024 and sell it today you would earn a total of 16.00 from holding Bodhi Tree Multimedia or generate 1.33% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bodhi Tree Multimedia vs. Entertainment Network Limited
Performance |
| Timeline |
| Bodhi Tree Multimedia |
| Entertainment Network |
Bodhi Tree and Entertainment Network Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bodhi Tree and Entertainment Network
The main advantage of trading using opposite Bodhi Tree and Entertainment Network positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bodhi Tree position performs unexpectedly, Entertainment Network 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 Entertainment Network will offset losses from the drop in Entertainment Network's long position.| Bodhi Tree vs. Cantabil Retail India | Bodhi Tree vs. Jaypee Infratech Limited | Bodhi Tree vs. Styrenix Performance Materials | Bodhi Tree vs. Future Retail 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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
Other Complementary Tools
| Financial Widgets Easily integrated Macroaxis content with over 30 different plug-and-play financial widgets | |
| Aroon Oscillator Analyze current equity momentum using Aroon Oscillator and other momentum ratios | |
| Transaction History View history of all your transactions and understand their impact on performance | |
| FinTech Suite Use AI to screen and filter profitable investment opportunities | |
| ETF Categories List of ETF categories grouped based on various criteria, such as the investment strategy or type of investments |