Correlation Between Bodhi Tree and Shigan Quantum

Can any of the company-specific risk be diversified away by investing in both Bodhi Tree and Shigan Quantum 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 Shigan Quantum 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 Shigan Quantum Tech, you can compare the effects of market volatilities on Bodhi Tree and Shigan Quantum 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 Shigan Quantum. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bodhi Tree and Shigan Quantum.

Diversification Opportunities for Bodhi Tree and Shigan Quantum

0.73

Correlation Coefficient

Bodhi Tree  Shigan Quantum

Poor diversification

The 3 months correlation between Bodhi and Shigan is 0.73. Overlapping area represents the amount of risk that can be diversified away by holding Bodhi Tree Multimedia and Shigan Quantum Tech in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shigan Quantum Tech 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 Shigan Quantum. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shigan Quantum Tech has no effect on the direction of Bodhi Tree i.e., Bodhi Tree and Shigan Quantum go up and down completely randomly.

Pair Corralation between Bodhi Tree and Shigan Quantum

Assuming the 90 days trading horizon Bodhi Tree Multimedia is expected to generate 0.69 times more return on investment than Shigan Quantum. However, Bodhi Tree Multimedia is 1.45 times less risky than Shigan Quantum. It trades about -0.08 of its potential returns per unit of risk. Shigan Quantum Tech is currently generating about -0.15 per unit of risk. If you would invest  1,057  in Bodhi Tree Multimedia on December 26, 2024 and sell it today you would lose (229.00) from holding Bodhi Tree Multimedia or give up 21.67% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	67.74%
Values	Daily Returns

Bodhi Tree Multimedia  vs.  Shigan Quantum Tech

Bodhi Tree Multimedia

Risk-Adjusted Performance

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 weak performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in April 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Shigan Quantum Tech

Risk-Adjusted Performance

Very Weak

Over the last 90 days Shigan Quantum Tech 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 somewhat strong which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Pair Trading with Bodhi Tree and Shigan Quantum

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

The idea behind Bodhi Tree Multimedia and Shigan Quantum Tech 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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.