Correlation Between Gokul Refoils and Bodhi Tree

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

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

Diversification Opportunities for Gokul Refoils and Bodhi Tree

-0.43

Correlation Coefficient

Gokul Refoils  Bodhi Tree

Very good diversification

The 3 months correlation between Gokul and Bodhi is -0.43. Overlapping area represents the amount of risk that can be diversified away by holding Gokul Refoils and 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 Gokul Refoils 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 Gokul Refoils and 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 Gokul Refoils i.e., Gokul Refoils and Bodhi Tree go up and down completely randomly.

Pair Corralation between Gokul Refoils and Bodhi Tree

Assuming the 90 days trading horizon Gokul Refoils is expected to generate 36.75 times less return on investment than Bodhi Tree. But when comparing it to its historical volatility, Gokul Refoils and is 23.66 times less risky than Bodhi Tree. It trades about 0.05 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  1,212  in Bodhi Tree Multimedia on September 21, 2024 and sell it today you would lose (166.00) from holding Bodhi Tree Multimedia or give up 13.7% of portfolio value over 90 days.

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

Gokul Refoils and  vs.  Bodhi Tree Multimedia

Gokul Refoils

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Gokul Refoils and are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. In spite of very abnormal forward-looking signals, Gokul Refoils displayed solid returns over the last few months and may actually be approaching a breakup point.

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

Pair Trading with Gokul Refoils and Bodhi Tree

The main advantage of trading using opposite Gokul Refoils and Bodhi Tree positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Gokul Refoils 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 Gokul Refoils and 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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.