Correlation Between Bodhi Tree and Interarch Building

Can any of the company-specific risk be diversified away by investing in both Bodhi Tree and Interarch Building 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 Bodhi Tree and Interarch Building into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Bodhi Tree Multimedia and Interarch Building Products, you can compare the effects of market volatilities on Bodhi Tree and Interarch Building 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 Bodhi Tree with a short position of Interarch Building. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bodhi Tree and Interarch Building.

Diversification Opportunities for Bodhi Tree and Interarch Building

0.0

Correlation Coefficient

Bodhi Tree  Interarch Building

Pay attention - limited upside

The 3 months correlation between Bodhi and Interarch is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Bodhi Tree Multimedia and Interarch Building Products in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Interarch Building and Bodhi Tree 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 Bodhi Tree Multimedia are associated (or correlated) with Interarch Building. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Interarch Building has no effect on the direction of Bodhi Tree i.e., Bodhi Tree and Interarch Building go up and down completely randomly.

Pair Corralation between Bodhi Tree and Interarch Building

If you would invest  1,243  in Bodhi Tree Multimedia on October 24, 2024 and sell it today you would lose (19.00) from holding Bodhi Tree Multimedia or give up 1.53% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

Bodhi Tree Multimedia  vs.  Interarch Building Products

Bodhi Tree Multimedia

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Bodhi Tree Multimedia has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, Bodhi Tree is not utilizing all of its potentials. The current stock price uproar, may contribute to short-horizon losses for the private investors.

Interarch Building

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Interarch Building Products has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable basic indicators, Interarch Building is not utilizing all of its potentials. The current stock price agitation, may contribute to short-term losses for the retail investors.

Pair Trading with Bodhi Tree and Interarch Building

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

The idea behind Bodhi Tree Multimedia and Interarch Building Products 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.

Check out your portfolio center.

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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.