Correlation Between Exide Industries and Bharatiya Global

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

By analyzing existing cross correlation between Exide Industries Limited and Bharatiya Global Infomedia, you can compare the effects of market volatilities on Exide Industries and Bharatiya Global 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 Exide Industries with a short position of Bharatiya Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of Exide Industries and Bharatiya Global.

Diversification Opportunities for Exide Industries and Bharatiya Global

-0.61

Correlation Coefficient

Exide Industries  Bharatiya Global

Excellent diversification

The 3 months correlation between Exide and Bharatiya is -0.61. Overlapping area represents the amount of risk that can be diversified away by holding Exide Industries Limited and Bharatiya Global Infomedia in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bharatiya Global Inf and Exide Industries 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 Exide Industries Limited are associated (or correlated) with Bharatiya Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bharatiya Global Inf has no effect on the direction of Exide Industries i.e., Exide Industries and Bharatiya Global go up and down completely randomly.

Pair Corralation between Exide Industries and Bharatiya Global

Assuming the 90 days trading horizon Exide Industries Limited is expected to under-perform the Bharatiya Global. In addition to that, Exide Industries is 1.34 times more volatile than Bharatiya Global Infomedia. It trades about -0.04 of its total potential returns per unit of risk. Bharatiya Global Infomedia is currently generating about 0.23 per unit of volatility. If you would invest  308.00  in Bharatiya Global Infomedia on September 4, 2024 and sell it today you would earn a total of  81.00  from holding Bharatiya Global Infomedia or generate 26.3% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	98.41%
Values	Daily Returns

Exide Industries Limited  vs.  Bharatiya Global Infomedia

Exide Industries

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Exide Industries Limited has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy forward indicators, Exide Industries is not utilizing all of its potentials. The latest stock price disarray, may contribute to short-term losses for the investors.

Bharatiya Global Inf

Risk-Adjusted Performance

18 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Bharatiya Global Infomedia are ranked lower than 18 (%) of all global equities and portfolios over the last 90 days. Despite quite weak fundamental drivers, Bharatiya Global disclosed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Exide Industries and Bharatiya Global

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

The idea behind Exide Industries Limited and Bharatiya Global Infomedia 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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.