Correlation Between Baazar Style and ITI

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

Diversification Opportunities for Baazar Style and ITI

0.47
  Correlation Coefficient
 ITI

Very weak diversification

The 3 months correlation between Baazar and ITI is 0.47. Overlapping area represents the amount of risk that can be diversified away by holding Baazar Style Retail and ITI Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ITI Limited and Baazar Style 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 Baazar Style Retail are associated (or correlated) with ITI. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ITI Limited has no effect on the direction of Baazar Style i.e., Baazar Style and ITI go up and down completely randomly.

Pair Corralation between Baazar Style and ITI

Assuming the 90 days trading horizon Baazar Style Retail is expected to under-perform the ITI. In addition to that, Baazar Style is 1.65 times more volatile than ITI Limited. It trades about -0.23 of its total potential returns per unit of risk. ITI Limited is currently generating about -0.22 per unit of volatility. If you would invest  32,715  in ITI Limited on November 27, 2024 and sell it today you would lose (5,295) from holding ITI Limited or give up 16.19% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthWeak
Accuracy100.0%
ValuesDaily Returns

Baazar Style Retail  vs.  ITI Limited

 Performance 
       Timeline  
Baazar Style Retail 

Risk-Adjusted Performance

Very Weak

 
Weak
 
Strong
Over the last 90 days Baazar Style Retail has generated negative risk-adjusted returns adding no value to investors with long positions. Despite unfluctuating performance in the last few months, the Stock's basic indicators remain somewhat strong which may send shares a bit higher in March 2025. The current disturbance may also be a sign of long term up-swing for the company investors.
ITI Limited 

Risk-Adjusted Performance

Weak

 
Weak
 
Strong
Compared to the overall equity markets, risk-adjusted returns on investments in ITI Limited are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of rather weak technical and fundamental indicators, ITI may actually be approaching a critical reversion point that can send shares even higher in March 2025.

Baazar Style and ITI Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Baazar Style and ITI

The main advantage of trading using opposite Baazar Style and ITI positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Baazar Style position performs unexpectedly, ITI 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 ITI will offset losses from the drop in ITI's long position.
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The idea behind Baazar Style Retail and ITI 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.
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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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