Correlation Between Bisichi Mining and Cairn Homes

Can any of the company-specific risk be diversified away by investing in both Bisichi Mining and Cairn Homes 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 Bisichi Mining and Cairn Homes into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Bisichi Mining PLC and Cairn Homes PLC, you can compare the effects of market volatilities on Bisichi Mining and Cairn Homes 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 Bisichi Mining with a short position of Cairn Homes. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bisichi Mining and Cairn Homes.

Diversification Opportunities for Bisichi Mining and Cairn Homes

0.12

Correlation Coefficient

Bisichi Mining  Cairn Homes

Average diversification

The 3 months correlation between Bisichi and Cairn is 0.12. Overlapping area represents the amount of risk that can be diversified away by holding Bisichi Mining PLC and Cairn Homes PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cairn Homes PLC and Bisichi Mining 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 Bisichi Mining PLC are associated (or correlated) with Cairn Homes. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cairn Homes PLC has no effect on the direction of Bisichi Mining i.e., Bisichi Mining and Cairn Homes go up and down completely randomly.

Pair Corralation between Bisichi Mining and Cairn Homes

Assuming the 90 days trading horizon Bisichi Mining is expected to generate 2.03 times less return on investment than Cairn Homes. In addition to that, Bisichi Mining is 1.91 times more volatile than Cairn Homes PLC. It trades about 0.04 of its total potential returns per unit of risk. Cairn Homes PLC is currently generating about 0.14 per unit of volatility. If you would invest  10,389  in Cairn Homes PLC on September 28, 2024 and sell it today you would earn a total of  8,531  from holding Cairn Homes PLC or generate 82.12% return on investment over 90 days.

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

Bisichi Mining PLC  vs.  Cairn Homes PLC

Bisichi Mining PLC

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Bisichi Mining PLC are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable basic indicators, Bisichi Mining is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

Cairn Homes PLC

Risk-Adjusted Performance

13 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Cairn Homes PLC are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. In spite of rather uncertain technical and fundamental indicators, Cairn Homes exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Bisichi Mining and Cairn Homes

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

The idea behind Bisichi Mining PLC and Cairn Homes PLC 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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.