Correlation Between Bikaji Foods and Arrow Greentech

Can any of the company-specific risk be diversified away by investing in both Bikaji Foods and Arrow Greentech 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 Bikaji Foods and Arrow Greentech into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Bikaji Foods International and Arrow Greentech Limited, you can compare the effects of market volatilities on Bikaji Foods and Arrow Greentech 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 Bikaji Foods with a short position of Arrow Greentech. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bikaji Foods and Arrow Greentech.

Diversification Opportunities for Bikaji Foods and Arrow Greentech

-0.09

Correlation Coefficient

Bikaji Foods  Arrow Greentech

Good diversification

The 3 months correlation between Bikaji and Arrow is -0.09. Overlapping area represents the amount of risk that can be diversified away by holding Bikaji Foods International and Arrow Greentech Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Arrow Greentech and Bikaji Foods 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 Bikaji Foods International are associated (or correlated) with Arrow Greentech. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Arrow Greentech has no effect on the direction of Bikaji Foods i.e., Bikaji Foods and Arrow Greentech go up and down completely randomly.

Pair Corralation between Bikaji Foods and Arrow Greentech

Assuming the 90 days trading horizon Bikaji Foods International is expected to under-perform the Arrow Greentech. But the stock apears to be less risky and, when comparing its historical volatility, Bikaji Foods International is 1.73 times less risky than Arrow Greentech. The stock trades about -0.18 of its potential returns per unit of risk. The Arrow Greentech Limited is currently generating about -0.06 of returns per unit of risk over similar time horizon. If you would invest  89,745  in Arrow Greentech Limited on October 6, 2024 and sell it today you would lose (9,755) from holding Arrow Greentech Limited or give up 10.87% of portfolio value over 90 days.

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

Bikaji Foods International  vs.  Arrow Greentech Limited

Bikaji Foods Interna

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Bikaji Foods International has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest unsteady performance, the Stock's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

Arrow Greentech

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Arrow Greentech Limited are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Even with relatively uncertain technical and fundamental indicators, Arrow Greentech may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Pair Trading with Bikaji Foods and Arrow Greentech

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

The idea behind Bikaji Foods International and Arrow Greentech Limited 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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.