Correlation Between Bigbloc Construction and Teamlease Services

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

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

Diversification Opportunities for Bigbloc Construction and Teamlease Services

0.34

Correlation Coefficient

Bigbloc Construction  Teamlease Services

Weak diversification

The 3 months correlation between Bigbloc and Teamlease is 0.34. Overlapping area represents the amount of risk that can be diversified away by holding Bigbloc Construction Limited and Teamlease Services Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Teamlease Services and Bigbloc Construction 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 Bigbloc Construction Limited are associated (or correlated) with Teamlease Services. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Teamlease Services has no effect on the direction of Bigbloc Construction i.e., Bigbloc Construction and Teamlease Services go up and down completely randomly.

Pair Corralation between Bigbloc Construction and Teamlease Services

Assuming the 90 days trading horizon Bigbloc Construction is expected to generate 2.84 times less return on investment than Teamlease Services. In addition to that, Bigbloc Construction is 1.56 times more volatile than Teamlease Services Limited. It trades about 0.04 of its total potential returns per unit of risk. Teamlease Services Limited is currently generating about 0.19 per unit of volatility. If you would invest  271,200  in Teamlease Services Limited on September 25, 2024 and sell it today you would earn a total of  18,755  from holding Teamlease Services Limited or generate 6.92% return on investment over 90 days.

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

Bigbloc Construction Limited  vs.  Teamlease Services Limited

Bigbloc Construction

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Bigbloc Construction Limited has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest unsteady performance, the Stock's essential indicators remain sound and the latest tumult on Wall Street may also be a sign of longer-term gains for the firm shareholders.

Teamlease Services

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Teamlease Services Limited has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, Teamlease Services is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Bigbloc Construction and Teamlease Services

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

The idea behind Bigbloc Construction Limited and Teamlease Services 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.

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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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.