Correlation Between Bhiraj Office and JCK Hospitality

Can any of the company-specific risk be diversified away by investing in both Bhiraj Office and JCK Hospitality 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 Bhiraj Office and JCK Hospitality into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Bhiraj Office Leasehold and JCK Hospitality Public, you can compare the effects of market volatilities on Bhiraj Office and JCK Hospitality 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 Bhiraj Office with a short position of JCK Hospitality. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bhiraj Office and JCK Hospitality.

Diversification Opportunities for Bhiraj Office and JCK Hospitality

0.22

Correlation Coefficient

Bhiraj Office  JCK Hospitality

Modest diversification

The 3 months correlation between Bhiraj and JCK is 0.22. Overlapping area represents the amount of risk that can be diversified away by holding Bhiraj Office Leasehold and JCK Hospitality Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on JCK Hospitality Public and Bhiraj Office 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 Bhiraj Office Leasehold are associated (or correlated) with JCK Hospitality. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of JCK Hospitality Public has no effect on the direction of Bhiraj Office i.e., Bhiraj Office and JCK Hospitality go up and down completely randomly.

Pair Corralation between Bhiraj Office and JCK Hospitality

Assuming the 90 days trading horizon Bhiraj Office Leasehold is expected to generate 0.05 times more return on investment than JCK Hospitality. However, Bhiraj Office Leasehold is 21.04 times less risky than JCK Hospitality. It trades about -0.04 of its potential returns per unit of risk. JCK Hospitality Public is currently generating about -0.03 per unit of risk. If you would invest  487.00  in Bhiraj Office Leasehold on December 30, 2024 and sell it today you would lose (9.00) from holding Bhiraj Office Leasehold or give up 1.85% of portfolio value over 90 days.

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

Bhiraj Office Leasehold  vs.  JCK Hospitality Public

Bhiraj Office Leasehold

Risk-Adjusted Performance

Very Weak

Over the last 90 days Bhiraj Office Leasehold has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound technical and fundamental indicators, Bhiraj Office is not utilizing all of its potentials. The current stock price tumult, may contribute to shorter-term losses for the shareholders.

JCK Hospitality Public

Risk-Adjusted Performance

Very Weak

Over the last 90 days JCK Hospitality Public has generated negative risk-adjusted returns adding no value to investors with long positions. Despite conflicting performance in the last few months, the Stock's forward-looking signals remain quite persistent which may send shares a bit higher in April 2025. The latest mess may also be a sign of long-standing up-swing for the company institutional investors.

Pair Trading with Bhiraj Office and JCK Hospitality

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

The idea behind Bhiraj Office Leasehold and JCK Hospitality Public 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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..