Correlation Between Can Fin and Bodhi Tree

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

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

Diversification Opportunities for Can Fin and Bodhi Tree

0.05

Correlation Coefficient

Can Fin  Bodhi Tree

Significant diversification

The 3 months correlation between Can and Bodhi is 0.05. Overlapping area represents the amount of risk that can be diversified away by holding Can Fin Homes and Bodhi Tree Multimedia in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bodhi Tree Multimedia and Can Fin 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 Can Fin Homes are associated (or correlated) with Bodhi Tree. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bodhi Tree Multimedia has no effect on the direction of Can Fin i.e., Can Fin and Bodhi Tree go up and down completely randomly.

Pair Corralation between Can Fin and Bodhi Tree

Assuming the 90 days trading horizon Can Fin is expected to generate 84.48 times less return on investment than Bodhi Tree. But when comparing it to its historical volatility, Can Fin Homes is 37.34 times less risky than Bodhi Tree. It trades about 0.03 of its potential returns per unit of risk. Bodhi Tree Multimedia is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest  1,654  in Bodhi Tree Multimedia on October 25, 2024 and sell it today you would lose (430.00) from holding Bodhi Tree Multimedia or give up 26.0% of portfolio value over 90 days.

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

Can Fin Homes  vs.  Bodhi Tree Multimedia

Can Fin Homes

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Can Fin Homes has generated negative risk-adjusted returns adding no value to investors with long positions. Despite unfluctuating performance in the last few months, the Stock's basic indicators remain fairly strong which may send shares a bit higher in February 2025. The recent confusion may also be a sign of long-lasting up-swing for the firm traders.

Bodhi Tree Multimedia

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Bodhi Tree Multimedia are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable basic indicators, Bodhi Tree is not utilizing all of its potentials. The latest stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Can Fin and Bodhi Tree

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

The idea behind Can Fin Homes and Bodhi Tree Multimedia 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 Transaction History module to view history of all your transactions and understand their impact on performance.