Correlation Between Ananda Development and Big Camera

Can any of the company-specific risk be diversified away by investing in both Ananda Development and Big Camera 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 Ananda Development and Big Camera into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Ananda Development Public and Big Camera, you can compare the effects of market volatilities on Ananda Development and Big Camera 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 Ananda Development with a short position of Big Camera. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ananda Development and Big Camera.

Diversification Opportunities for Ananda Development and Big Camera

0.94

Correlation Coefficient

Ananda Development  Big Camera

Almost no diversification

The 3 months correlation between Ananda and Big is 0.94. Overlapping area represents the amount of risk that can be diversified away by holding Ananda Development Public and Big Camera in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Big Camera and Ananda Development 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 Ananda Development Public are associated (or correlated) with Big Camera. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Big Camera has no effect on the direction of Ananda Development i.e., Ananda Development and Big Camera go up and down completely randomly.

Pair Corralation between Ananda Development and Big Camera

Assuming the 90 days trading horizon Ananda Development Public is expected to under-perform the Big Camera. But the stock apears to be less risky and, when comparing its historical volatility, Ananda Development Public is 1.65 times less risky than Big Camera. The stock trades about -0.3 of its potential returns per unit of risk. The Big Camera is currently generating about -0.16 of returns per unit of risk over similar time horizon. If you would invest  36.00  in Big Camera on October 6, 2024 and sell it today you would lose (4.00) from holding Big Camera or give up 11.11% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Strong
Accuracy	100.0%
Values	Daily Returns

Ananda Development Public  vs.  Big Camera

Ananda Development Public

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Ananda Development Public has generated negative risk-adjusted returns adding no value to investors with long positions. Despite conflicting performance in the last few months, the Stock's forward-looking signals remain quite persistent which may send shares a bit higher in February 2025. The latest mess may also be a sign of long-standing up-swing for the company institutional investors.

Big Camera

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with Ananda Development and Big Camera

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

The idea behind Ananda Development Public and Big Camera 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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.