Correlation Between Bigbloc Construction and Kaushalya Infrastructure

Can any of the company-specific risk be diversified away by investing in both Bigbloc Construction and Kaushalya Infrastructure 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 Bigbloc Construction and Kaushalya Infrastructure into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Bigbloc Construction Limited and Kaushalya Infrastructure Development, you can compare the effects of market volatilities on Bigbloc Construction and Kaushalya Infrastructure 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 Bigbloc Construction with a short position of Kaushalya Infrastructure. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bigbloc Construction and Kaushalya Infrastructure.

Diversification Opportunities for Bigbloc Construction and Kaushalya Infrastructure

0.44

Correlation Coefficient

Bigbloc Construction  Kaushalya Infrastructure

Very weak diversification

The 3 months correlation between Bigbloc and Kaushalya is 0.44. Overlapping area represents the amount of risk that can be diversified away by holding Bigbloc Construction Limited and Kaushalya Infrastructure Devel in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kaushalya Infrastructure and Bigbloc Construction 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 Bigbloc Construction Limited are associated (or correlated) with Kaushalya Infrastructure. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kaushalya Infrastructure has no effect on the direction of Bigbloc Construction i.e., Bigbloc Construction and Kaushalya Infrastructure go up and down completely randomly.

Pair Corralation between Bigbloc Construction and Kaushalya Infrastructure

Assuming the 90 days trading horizon Bigbloc Construction Limited is expected to under-perform the Kaushalya Infrastructure. But the stock apears to be less risky and, when comparing its historical volatility, Bigbloc Construction Limited is 1.21 times less risky than Kaushalya Infrastructure. The stock trades about -0.25 of its potential returns per unit of risk. The Kaushalya Infrastructure Development is currently generating about -0.05 of returns per unit of risk over similar time horizon. If you would invest  99,975  in Kaushalya Infrastructure Development on December 1, 2024 and sell it today you would lose (15,340) from holding Kaushalya Infrastructure Development or give up 15.34% of portfolio value over 90 days.

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

Bigbloc Construction Limited  vs.  Kaushalya Infrastructure Devel

Bigbloc Construction

Risk-Adjusted Performance

Very Weak

Over the last 90 days Bigbloc Construction Limited 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 essential indicators remain rather sound which may send shares a bit higher in April 2025. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

Kaushalya Infrastructure

Risk-Adjusted Performance

Very Weak

Over the last 90 days Kaushalya Infrastructure Development has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest unfluctuating performance, the Stock's essential indicators remain persistent and the latest mess on Wall Street may also be a sign of long-standing gains for the company institutional investors.

Pair Trading with Bigbloc Construction and Kaushalya Infrastructure

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

The idea behind Bigbloc Construction Limited and Kaushalya Infrastructure Development 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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.