Correlation Between BAG Films and Hemisphere Properties

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

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

Diversification Opportunities for BAG Films and Hemisphere Properties

0.56

Correlation Coefficient

BAG Films  Hemisphere Properties

Very weak diversification

The 3 months correlation between BAG and Hemisphere is 0.56. Overlapping area represents the amount of risk that can be diversified away by holding BAG Films and and Hemisphere Properties India in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hemisphere Properties and BAG Films 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 BAG Films and are associated (or correlated) with Hemisphere Properties. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hemisphere Properties has no effect on the direction of BAG Films i.e., BAG Films and Hemisphere Properties go up and down completely randomly.

Pair Corralation between BAG Films and Hemisphere Properties

Assuming the 90 days trading horizon BAG Films and is expected to under-perform the Hemisphere Properties. In addition to that, BAG Films is 1.37 times more volatile than Hemisphere Properties India. It trades about -0.09 of its total potential returns per unit of risk. Hemisphere Properties India is currently generating about -0.05 per unit of volatility. If you would invest  18,468  in Hemisphere Properties India on October 10, 2024 and sell it today you would lose (1,596) from holding Hemisphere Properties India or give up 8.64% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	98.39%
Values	Daily Returns

BAG Films and  vs.  Hemisphere Properties India

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 inconsistent 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.

Hemisphere Properties

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Hemisphere Properties India has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest weak performance, the Stock's basic indicators remain healthy and the recent disarray on Wall Street may also be a sign of long period gains for the firm investors.

Pair Trading with BAG Films and Hemisphere Properties

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

The idea behind BAG Films and and Hemisphere Properties India 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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.