Correlation Between Business Online and Bhiraj Office

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

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

Diversification Opportunities for Business Online and Bhiraj Office

-0.6

Correlation Coefficient

Business Online  Bhiraj Office

Excellent diversification

The 3 months correlation between Business and Bhiraj is -0.6. Overlapping area represents the amount of risk that can be diversified away by holding Business Online PCL and Bhiraj Office Leasehold in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bhiraj Office Leasehold and Business Online 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 Business Online PCL are associated (or correlated) with Bhiraj Office. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bhiraj Office Leasehold has no effect on the direction of Business Online i.e., Business Online and Bhiraj Office go up and down completely randomly.

Pair Corralation between Business Online and Bhiraj Office

Assuming the 90 days trading horizon Business Online PCL is expected to under-perform the Bhiraj Office. In addition to that, Business Online is 1.5 times more volatile than Bhiraj Office Leasehold. It trades about -0.11 of its total potential returns per unit of risk. Bhiraj Office Leasehold is currently generating about 0.15 per unit of volatility. If you would invest  470.00  in Bhiraj Office Leasehold on September 13, 2024 and sell it today you would earn a total of  60.00  from holding Bhiraj Office Leasehold or generate 12.77% return on investment over 90 days.

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

Business Online PCL  vs.  Bhiraj Office Leasehold

Business Online PCL

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Business Online PCL 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 essential indicators remain quite persistent which may send shares a bit higher in January 2025. The latest mess may also be a sign of long-standing up-swing for the company institutional investors.

Bhiraj Office Leasehold

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Bhiraj Office Leasehold are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. In spite of rather weak technical and fundamental indicators, Bhiraj Office exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Business Online and Bhiraj Office

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

The idea behind Business Online PCL and Bhiraj Office Leasehold 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 Valuation module to check real value of public entities based on technical and fundamental data.