Correlation Between AUTHUM INVESTMENT and BAG Films

Can any of the company-specific risk be diversified away by investing in both AUTHUM INVESTMENT and BAG Films 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 AUTHUM INVESTMENT and BAG Films into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between AUTHUM INVESTMENT INFRASTRUCTU and BAG Films and, you can compare the effects of market volatilities on AUTHUM INVESTMENT and BAG Films 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 AUTHUM INVESTMENT with a short position of BAG Films. Check out your portfolio center. Please also check ongoing floating volatility patterns of AUTHUM INVESTMENT and BAG Films.

Diversification Opportunities for AUTHUM INVESTMENT and BAG Films

0.45

Correlation Coefficient

AUTHUM INVESTMENT  BAG Films

Very weak diversification

The 3 months correlation between AUTHUM and BAG is 0.45. Overlapping area represents the amount of risk that can be diversified away by holding AUTHUM INVESTMENT INFRASTRUCTU and BAG Films and in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BAG Films and AUTHUM INVESTMENT 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 AUTHUM INVESTMENT INFRASTRUCTU are associated (or correlated) with BAG Films. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BAG Films has no effect on the direction of AUTHUM INVESTMENT i.e., AUTHUM INVESTMENT and BAG Films go up and down completely randomly.

Pair Corralation between AUTHUM INVESTMENT and BAG Films

Assuming the 90 days trading horizon AUTHUM INVESTMENT INFRASTRUCTU is expected to generate 0.98 times more return on investment than BAG Films. However, AUTHUM INVESTMENT INFRASTRUCTU is 1.02 times less risky than BAG Films. It trades about 0.02 of its potential returns per unit of risk. BAG Films and is currently generating about -0.24 per unit of risk. If you would invest  184,775  in AUTHUM INVESTMENT INFRASTRUCTU on October 12, 2024 and sell it today you would earn a total of  310.00  from holding AUTHUM INVESTMENT INFRASTRUCTU or generate 0.17% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	95.24%
Values	Daily Returns

AUTHUM INVESTMENT INFRASTRUCTU  vs.  BAG Films and

AUTHUM INVESTMENT

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in AUTHUM INVESTMENT INFRASTRUCTU are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively weak basic indicators, AUTHUM INVESTMENT may actually be approaching a critical reversion point that can send shares even higher in February 2025.

BAG Films

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days BAG Films and has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Stock's essential indicators remain very healthy which may send shares a bit higher in February 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

Pair Trading with AUTHUM INVESTMENT and BAG Films

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

The idea behind AUTHUM INVESTMENT INFRASTRUCTU and BAG Films and 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 Portfolio Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.