Correlation Between Bhiraj Office and Taokaenoi Food

Can any of the company-specific risk be diversified away by investing in both Bhiraj Office and Taokaenoi Food 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 Taokaenoi Food 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 Taokaenoi Food Marketing, you can compare the effects of market volatilities on Bhiraj Office and Taokaenoi Food 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 Taokaenoi Food. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bhiraj Office and Taokaenoi Food.

Diversification Opportunities for Bhiraj Office and Taokaenoi Food

-0.53

Correlation Coefficient

Bhiraj Office  Taokaenoi Food

Excellent diversification

The 3 months correlation between Bhiraj and Taokaenoi is -0.53. Overlapping area represents the amount of risk that can be diversified away by holding Bhiraj Office Leasehold and Taokaenoi Food Marketing in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Taokaenoi Food Marketing 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 Taokaenoi Food. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Taokaenoi Food Marketing has no effect on the direction of Bhiraj Office i.e., Bhiraj Office and Taokaenoi Food go up and down completely randomly.

Pair Corralation between Bhiraj Office and Taokaenoi Food

Assuming the 90 days trading horizon Bhiraj Office Leasehold is expected to under-perform the Taokaenoi Food. But the stock apears to be less risky and, when comparing its historical volatility, Bhiraj Office Leasehold is 4.07 times less risky than Taokaenoi Food. The stock trades about -0.24 of its potential returns per unit of risk. The Taokaenoi Food Marketing is currently generating about 0.17 of returns per unit of risk over similar time horizon. If you would invest  810.00  in Taokaenoi Food Marketing on October 25, 2024 and sell it today you would earn a total of  45.00  from holding Taokaenoi Food Marketing or generate 5.56% return on investment over 90 days.

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

Bhiraj Office Leasehold  vs.  Taokaenoi Food Marketing

Bhiraj Office Leasehold

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Bhiraj Office Leasehold are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. 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.

Taokaenoi Food Marketing

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Taokaenoi Food Marketing has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's basic indicators remain quite persistent which may send shares a bit higher in February 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 Taokaenoi Food

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

The idea behind Bhiraj Office Leasehold and Taokaenoi Food Marketing 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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.