Correlation Between Cannara Biotech and Agra Ventures

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

By analyzing existing cross correlation between Cannara Biotech and Agra Ventures, you can compare the effects of market volatilities on Cannara Biotech and Agra Ventures 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 Cannara Biotech with a short position of Agra Ventures. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cannara Biotech and Agra Ventures.

Diversification Opportunities for Cannara Biotech and Agra Ventures

0.0

Correlation Coefficient

Cannara Biotech  Agra Ventures

Pay attention - limited upside

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

Pair Corralation between Cannara Biotech and Agra Ventures

If you would invest  53.00  in Cannara Biotech on December 29, 2024 and sell it today you would earn a total of  39.00  from holding Cannara Biotech or generate 73.58% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	95.31%
Values	Daily Returns

Cannara Biotech  vs.  Agra Ventures

Cannara Biotech

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Cannara Biotech are ranked lower than 19 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile technical and fundamental indicators, Cannara Biotech reported solid returns over the last few months and may actually be approaching a breakup point.

Agra Ventures

Risk-Adjusted Performance

Very Weak

Over the last 90 days Agra Ventures has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, Agra Ventures is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Cannara Biotech and Agra Ventures

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

The idea behind Cannara Biotech and Agra Ventures 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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.