Correlation Between Ankit Metal and Bodhi Tree

Can any of the company-specific risk be diversified away by investing in both Ankit Metal and Bodhi Tree 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 Ankit Metal and Bodhi Tree into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Ankit Metal Power and Bodhi Tree Multimedia, you can compare the effects of market volatilities on Ankit Metal and Bodhi Tree 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 Ankit Metal with a short position of Bodhi Tree. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ankit Metal and Bodhi Tree.

Diversification Opportunities for Ankit Metal and Bodhi Tree

-0.17

Correlation Coefficient

Ankit Metal  Bodhi Tree

Good diversification

The 3 months correlation between Ankit and Bodhi is -0.17. Overlapping area represents the amount of risk that can be diversified away by holding Ankit Metal Power and Bodhi Tree Multimedia in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bodhi Tree Multimedia and Ankit Metal 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 Ankit Metal Power are associated (or correlated) with Bodhi Tree. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bodhi Tree Multimedia has no effect on the direction of Ankit Metal i.e., Ankit Metal and Bodhi Tree go up and down completely randomly.

Pair Corralation between Ankit Metal and Bodhi Tree

Assuming the 90 days trading horizon Ankit Metal Power is expected to under-perform the Bodhi Tree. But the stock apears to be less risky and, when comparing its historical volatility, Ankit Metal Power is 26.21 times less risky than Bodhi Tree. The stock trades about -0.01 of its potential returns per unit of risk. The Bodhi Tree Multimedia is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest  1,212  in Bodhi Tree Multimedia on September 21, 2024 and sell it today you would lose (166.00) from holding Bodhi Tree Multimedia or give up 13.7% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	95.9%
Values	Daily Returns

Ankit Metal Power  vs.  Bodhi Tree Multimedia

Ankit Metal Power

Risk-Adjusted Performance

12 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Ankit Metal Power are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. In spite of rather weak basic indicators, Ankit Metal exhibited solid returns over the last few months and may actually be approaching a breakup point.

Bodhi Tree Multimedia

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Bodhi Tree Multimedia has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unsteady performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in January 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Pair Trading with Ankit Metal and Bodhi Tree

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

The idea behind Ankit Metal Power and Bodhi Tree Multimedia 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 Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.