Correlation Between Shivalik Bimetal and Bosch

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

By analyzing existing cross correlation between Shivalik Bimetal Controls and Bosch Limited, you can compare the effects of market volatilities on Shivalik Bimetal and Bosch 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 Shivalik Bimetal with a short position of Bosch. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shivalik Bimetal and Bosch.

Diversification Opportunities for Shivalik Bimetal and Bosch

0.82

Correlation Coefficient

Shivalik Bimetal  Bosch

Very poor diversification

The 3 months correlation between Shivalik and Bosch is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding Shivalik Bimetal Controls and Bosch Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bosch Limited and Shivalik Bimetal 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 Shivalik Bimetal Controls are associated (or correlated) with Bosch. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bosch Limited has no effect on the direction of Shivalik Bimetal i.e., Shivalik Bimetal and Bosch go up and down completely randomly.

Pair Corralation between Shivalik Bimetal and Bosch

Assuming the 90 days trading horizon Shivalik Bimetal Controls is expected to under-perform the Bosch. In addition to that, Shivalik Bimetal is 1.5 times more volatile than Bosch Limited. It trades about 0.0 of its total potential returns per unit of risk. Bosch Limited is currently generating about 0.08 per unit of volatility. If you would invest  3,232,760  in Bosch Limited on September 2, 2024 and sell it today you would earn a total of  263,860  from holding Bosch Limited or generate 8.16% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Strong
Accuracy	98.44%
Values	Daily Returns

Shivalik Bimetal Controls  vs.  Bosch Limited

Shivalik Bimetal Controls

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Shivalik Bimetal Controls has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, Shivalik Bimetal is not utilizing all of its potentials. The latest stock price uproar, may contribute to short-horizon losses for the private investors.

Bosch Limited

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Bosch Limited are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain essential indicators, Bosch may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Shivalik Bimetal and Bosch

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

The idea behind Shivalik Bimetal Controls and Bosch Limited 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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.