Correlation Between BAG Films and Naga Dhunseri

Can any of the company-specific risk be diversified away by investing in both BAG Films and Naga Dhunseri 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 Naga Dhunseri 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 Naga Dhunseri Group, you can compare the effects of market volatilities on BAG Films and Naga Dhunseri 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 Naga Dhunseri. Check out your portfolio center. Please also check ongoing floating volatility patterns of BAG Films and Naga Dhunseri.

Diversification Opportunities for BAG Films and Naga Dhunseri

-0.29

Correlation Coefficient

BAG Films  Naga Dhunseri

Very good diversification

The 3 months correlation between BAG and Naga is -0.29. Overlapping area represents the amount of risk that can be diversified away by holding BAG Films and and Naga Dhunseri Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Naga Dhunseri Group 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 Naga Dhunseri. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Naga Dhunseri Group has no effect on the direction of BAG Films i.e., BAG Films and Naga Dhunseri go up and down completely randomly.

Pair Corralation between BAG Films and Naga Dhunseri

Assuming the 90 days trading horizon BAG Films and is expected to generate 1.53 times more return on investment than Naga Dhunseri. However, BAG Films is 1.53 times more volatile than Naga Dhunseri Group. It trades about 0.08 of its potential returns per unit of risk. Naga Dhunseri Group is currently generating about -0.04 per unit of risk. If you would invest  987.00  in BAG Films and on September 26, 2024 and sell it today you would earn a total of  93.00  from holding BAG Films and or generate 9.42% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	97.62%
Values	Daily Returns

BAG Films and  vs.  Naga Dhunseri Group

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 very healthy essential indicators, BAG Films is not utilizing all of its potentials. The latest stock price disarray, may contribute to short-term losses for the investors.

Naga Dhunseri Group

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Naga Dhunseri Group are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively unsteady basic indicators, Naga Dhunseri unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with BAG Films and Naga Dhunseri

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

The idea behind BAG Films and and Naga Dhunseri Group 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.

Check out your portfolio center.

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 Money Managers module to screen money managers from public funds and ETFs managed around the world.