Correlation Between NIFTY SUMER and Bkm Industries

Specify exactly 2 symbols:
Can any of the company-specific risk be diversified away by investing in both NIFTY SUMER and Bkm Industries 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 NIFTY SUMER and Bkm Industries into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NIFTY SUMER DURABLES and Bkm Industries Limited, you can compare the effects of market volatilities on NIFTY SUMER and Bkm Industries 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 NIFTY SUMER with a short position of Bkm Industries. Check out your portfolio center. Please also check ongoing floating volatility patterns of NIFTY SUMER and Bkm Industries.

Diversification Opportunities for NIFTY SUMER and Bkm Industries

0.07
  Correlation Coefficient

Significant diversification

The 3 months correlation between NIFTY and Bkm is 0.07. Overlapping area represents the amount of risk that can be diversified away by holding NIFTY SUMER DURABLES and Bkm Industries Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bkm Industries and NIFTY SUMER 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 NIFTY SUMER DURABLES are associated (or correlated) with Bkm Industries. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bkm Industries has no effect on the direction of NIFTY SUMER i.e., NIFTY SUMER and Bkm Industries go up and down completely randomly.
    Optimize

Pair Corralation between NIFTY SUMER and Bkm Industries

Assuming the 90 days trading horizon NIFTY SUMER DURABLES is expected to generate 1.79 times more return on investment than Bkm Industries. However, NIFTY SUMER is 1.79 times more volatile than Bkm Industries Limited. It trades about 0.2 of its potential returns per unit of risk. Bkm Industries Limited is currently generating about 0.22 per unit of risk. If you would invest  3,977,520  in NIFTY SUMER DURABLES on September 23, 2024 and sell it today you would earn a total of  152,945  from holding NIFTY SUMER DURABLES or generate 3.85% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthInsignificant
Accuracy95.45%
ValuesDaily Returns

NIFTY SUMER DURABLES  vs.  Bkm Industries Limited

 Performance 
       Timeline  

NIFTY SUMER and Bkm Industries Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with NIFTY SUMER and Bkm Industries

The main advantage of trading using opposite NIFTY SUMER and Bkm Industries positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NIFTY SUMER position performs unexpectedly, Bkm Industries 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 Bkm Industries will offset losses from the drop in Bkm Industries' long position.
NIFTY SUMER vs. HDFC Asset Management
NIFTY SUMER vs. DJ Mediaprint Logistics
NIFTY SUMER vs. Home First Finance
NIFTY SUMER vs. Eros International Media
The idea behind NIFTY SUMER DURABLES and Bkm Industries Limited pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
Bkm Industries vs. NMDC Limited
Bkm Industries vs. Steel Authority of
Bkm Industries vs. Embassy Office Parks
Bkm Industries vs. Gujarat Narmada Valley
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 Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.

Other Complementary Tools

Premium Stories
Follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope
Watchlist Optimization
Optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm
Analyst Advice
Analyst recommendations and target price estimates broken down by several categories
CEOs Directory
Screen CEOs from public companies around the world
Portfolio Diagnostics
Use generated alerts and portfolio events aggregator to diagnose current holdings


 
Macroaxis helps investors of all levels and skills to maximize the upside of all their holdings and minimize the risk associated with market volatility, economic swings, and company-specific events. View terms and conditions
 
Feedback Blog
Made with optimal in San Francisco
2024 Macroaxis LLC
COMMON DESTINATIONS
MAIN CATEGORIES
COMPANY