Correlation Between Bodhi Tree and Syrma SGS
Can any of the company-specific risk be diversified away by investing in both Bodhi Tree and Syrma SGS 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 Syrma SGS 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 Syrma SGS Technology, you can compare the effects of market volatilities on Bodhi Tree and Syrma SGS 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 Syrma SGS. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bodhi Tree and Syrma SGS.
Diversification Opportunities for Bodhi Tree and Syrma SGS
-0.65 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Bodhi and Syrma is -0.65. Overlapping area represents the amount of risk that can be diversified away by holding Bodhi Tree Multimedia and Syrma SGS Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Syrma SGS Technology 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 Syrma SGS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Syrma SGS Technology has no effect on the direction of Bodhi Tree i.e., Bodhi Tree and Syrma SGS go up and down completely randomly.
Pair Corralation between Bodhi Tree and Syrma SGS
Assuming the 90 days trading horizon Bodhi Tree is expected to generate 4.0 times less return on investment than Syrma SGS. In addition to that, Bodhi Tree is 1.09 times more volatile than Syrma SGS Technology. It trades about 0.03 of its total potential returns per unit of risk. Syrma SGS Technology is currently generating about 0.15 per unit of volatility. If you would invest 51,790 in Syrma SGS Technology on September 2, 2024 and sell it today you would earn a total of 4,825 from holding Syrma SGS Technology or generate 9.32% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bodhi Tree Multimedia vs. Syrma SGS Technology
Performance |
| Timeline |
| Bodhi Tree Multimedia |
| Syrma SGS Technology |
Bodhi Tree and Syrma SGS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bodhi Tree and Syrma SGS
The main advantage of trading using opposite Bodhi Tree and Syrma SGS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bodhi Tree position performs unexpectedly, Syrma SGS 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 Syrma SGS will offset losses from the drop in Syrma SGS'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 |
| Syrma SGS vs. The Orissa Minerals | Syrma SGS vs. Malu Paper Mills | Syrma SGS vs. Kingfa Science Technology | Syrma SGS vs. Rico Auto Industries |
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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
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