Correlation Between Shyam Telecom and BAG Films

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

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

Diversification Opportunities for Shyam Telecom and BAG Films

-0.53

Correlation Coefficient

Shyam Telecom  BAG Films

Excellent diversification

The 3 months correlation between Shyam and BAG is -0.53. Overlapping area represents the amount of risk that can be diversified away by holding Shyam Telecom Limited and BAG Films and in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BAG Films and Shyam Telecom 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 Shyam Telecom Limited are associated (or correlated) with BAG Films. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BAG Films has no effect on the direction of Shyam Telecom i.e., Shyam Telecom and BAG Films go up and down completely randomly.

Pair Corralation between Shyam Telecom and BAG Films

Assuming the 90 days trading horizon Shyam Telecom Limited is expected to under-perform the BAG Films. In addition to that, Shyam Telecom is 1.1 times more volatile than BAG Films and. It trades about -0.13 of its total potential returns per unit of risk. BAG Films and is currently generating about -0.07 per unit of volatility. If you would invest  1,123  in BAG Films and on October 7, 2024 and sell it today you would lose (111.00) from holding BAG Films and or give up 9.88% of portfolio value over 90 days.

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

Shyam Telecom Limited  vs.  BAG Films and

Shyam Telecom Limited

Risk-Adjusted Performance

19 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Shyam Telecom Limited are ranked lower than 19 (%) of all global equities and portfolios over the last 90 days. In spite of rather weak basic indicators, Shyam Telecom exhibited solid returns over the last few months and may actually be approaching a breakup point.

BAG Films

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days BAG Films and has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest unfluctuating performance, the Stock's essential indicators remain healthy and the recent disarray on Wall Street may also be a sign of long period gains for the firm investors.

Pair Trading with Shyam Telecom and BAG Films

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

The idea behind Shyam Telecom Limited and BAG Films and 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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.