Correlation Between Bodhi Tree and Shipping
Can any of the company-specific risk be diversified away by investing in both Bodhi Tree and Shipping 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 Shipping 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 Shipping, you can compare the effects of market volatilities on Bodhi Tree and Shipping 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 Shipping. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bodhi Tree and Shipping.
Diversification Opportunities for Bodhi Tree and Shipping
0.46 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Bodhi and Shipping is 0.46. Overlapping area represents the amount of risk that can be diversified away by holding Bodhi Tree Multimedia and Shipping in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shipping 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 Shipping. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shipping has no effect on the direction of Bodhi Tree i.e., Bodhi Tree and Shipping go up and down completely randomly.
Pair Corralation between Bodhi Tree and Shipping
Assuming the 90 days trading horizon Bodhi Tree Multimedia is expected to under-perform the Shipping. But the stock apears to be less risky and, when comparing its historical volatility, Bodhi Tree Multimedia is 1.02 times less risky than Shipping. The stock trades about -0.04 of its potential returns per unit of risk. The Shipping is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 21,499 in Shipping on September 3, 2024 and sell it today you would earn a total of 1,988 from holding Shipping or generate 9.25% 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. Shipping
Performance |
| Timeline |
| Bodhi Tree Multimedia |
| Shipping |
Bodhi Tree and Shipping Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bodhi Tree and Shipping
The main advantage of trading using opposite Bodhi Tree and Shipping positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bodhi Tree position performs unexpectedly, Shipping 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 Shipping will offset losses from the drop in Shipping's long position.| Bodhi Tree vs. Shipping | Bodhi Tree vs. Indo Borax Chemicals | Bodhi Tree vs. Kingfa Science Technology | Bodhi Tree vs. Alkali Metals Limited |
| Shipping vs. Sintex Plastics Technology | Shipping vs. Shyam Metalics and | Shipping vs. Hilton Metal Forging | Shipping vs. Sonata Software 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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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