Correlation Between Autocorp Holding and Bhiraj Office

Can any of the company-specific risk be diversified away by investing in both Autocorp Holding and Bhiraj Office 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 Autocorp Holding and Bhiraj Office into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Autocorp Holding Public and Bhiraj Office Leasehold, you can compare the effects of market volatilities on Autocorp Holding and Bhiraj Office 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 Autocorp Holding with a short position of Bhiraj Office. Check out your portfolio center. Please also check ongoing floating volatility patterns of Autocorp Holding and Bhiraj Office.

Diversification Opportunities for Autocorp Holding and Bhiraj Office

-0.2

Correlation Coefficient

Autocorp Holding  Bhiraj Office

Good diversification

The 3 months correlation between Autocorp and Bhiraj is -0.2. Overlapping area represents the amount of risk that can be diversified away by holding Autocorp Holding Public and Bhiraj Office Leasehold in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bhiraj Office Leasehold and Autocorp Holding 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 Autocorp Holding Public are associated (or correlated) with Bhiraj Office. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bhiraj Office Leasehold has no effect on the direction of Autocorp Holding i.e., Autocorp Holding and Bhiraj Office go up and down completely randomly.

Pair Corralation between Autocorp Holding and Bhiraj Office

Assuming the 90 days trading horizon Autocorp Holding Public is expected to under-perform the Bhiraj Office. In addition to that, Autocorp Holding is 1.1 times more volatile than Bhiraj Office Leasehold. It trades about -0.08 of its total potential returns per unit of risk. Bhiraj Office Leasehold is currently generating about 0.05 per unit of volatility. If you would invest  500.00  in Bhiraj Office Leasehold on September 24, 2024 and sell it today you would earn a total of  5.00  from holding Bhiraj Office Leasehold or generate 1.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Autocorp Holding Public  vs.  Bhiraj Office Leasehold

Autocorp Holding Public

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Autocorp Holding Public has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's technical and fundamental indicators remain quite persistent which may send shares a bit higher in January 2025. The latest mess may also be a sign of long-standing up-swing for the company institutional investors.

Bhiraj Office Leasehold

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Bhiraj Office Leasehold has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound technical and fundamental indicators, Bhiraj Office is not utilizing all of its potentials. The current stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with Autocorp Holding and Bhiraj Office

The main advantage of trading using opposite Autocorp Holding and Bhiraj Office positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Autocorp Holding position performs unexpectedly, Bhiraj Office 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 Bhiraj Office will offset losses from the drop in Bhiraj Office's long position.

The idea behind Autocorp Holding Public and Bhiraj Office Leasehold 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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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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.