Correlation Between Wipro Limited and BigBearai Holdings

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

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

Diversification Opportunities for Wipro Limited and BigBearai Holdings

0.53

Correlation Coefficient

Wipro Limited  BigBearai Holdings

Very weak diversification

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

Pair Corralation between Wipro Limited and BigBearai Holdings

Considering the 90-day investment horizon Wipro Limited ADR is expected to generate 0.21 times more return on investment than BigBearai Holdings. However, Wipro Limited ADR is 4.74 times less risky than BigBearai Holdings. It trades about -0.18 of its potential returns per unit of risk. BigBearai Holdings is currently generating about -0.25 per unit of risk. If you would invest  336.00  in Wipro Limited ADR on December 29, 2024 and sell it today you would lose (23.00) from holding Wipro Limited ADR or give up 6.85% of portfolio value over 90 days.

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

Wipro Limited ADR  vs.  BigBearai Holdings

Wipro Limited ADR

Risk-Adjusted Performance

Very Weak

Over the last 90 days Wipro Limited ADR has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest inconsistent performance, the Stock's forward indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the firm private investors.

BigBearai Holdings

Risk-Adjusted Performance

Very Weak

Over the last 90 days BigBearai Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest unsteady performance, the Stock's basic indicators remain strong and the recent confusion on Wall Street may also be a sign of long-lasting gains for the firm traders.

Pair Trading with Wipro Limited and BigBearai Holdings

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

The idea behind Wipro Limited ADR and BigBearai Holdings 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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.