Correlation Between Clean Science and Bikaji Foods

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

By analyzing existing cross correlation between Clean Science and and Bikaji Foods International, you can compare the effects of market volatilities on Clean Science and Bikaji Foods 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 Clean Science with a short position of Bikaji Foods. Check out your portfolio center. Please also check ongoing floating volatility patterns of Clean Science and Bikaji Foods.

Diversification Opportunities for Clean Science and Bikaji Foods

0.59

Correlation Coefficient

Clean Science  Bikaji Foods

Very weak diversification

The 3 months correlation between Clean and Bikaji is 0.59. Overlapping area represents the amount of risk that can be diversified away by holding Clean Science and and Bikaji Foods International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bikaji Foods Interna and Clean Science 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 Clean Science and are associated (or correlated) with Bikaji Foods. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bikaji Foods Interna has no effect on the direction of Clean Science i.e., Clean Science and Bikaji Foods go up and down completely randomly.

Pair Corralation between Clean Science and Bikaji Foods

Assuming the 90 days trading horizon Clean Science and is expected to under-perform the Bikaji Foods. But the stock apears to be less risky and, when comparing its historical volatility, Clean Science and is 1.38 times less risky than Bikaji Foods. The stock trades about -0.09 of its potential returns per unit of risk. The Bikaji Foods International is currently generating about -0.04 of returns per unit of risk over similar time horizon. If you would invest  78,135  in Bikaji Foods International on December 24, 2024 and sell it today you would lose (8,435) from holding Bikaji Foods International or give up 10.8% of portfolio value over 90 days.

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

Clean Science and  vs.  Bikaji Foods International

Clean Science

Risk-Adjusted Performance

Very Weak

Over the last 90 days Clean Science and has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of abnormal performance in the last few months, the Stock's technical and fundamental indicators remain very healthy which may send shares a bit higher in April 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

Bikaji Foods Interna

Risk-Adjusted Performance

Very Weak

Over the last 90 days Bikaji Foods International has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest uncertain performance, the Stock's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

Pair Trading with Clean Science and Bikaji Foods

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

The idea behind Clean Science and and Bikaji Foods International 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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.