Correlation Between Sena Development and Bhiraj Office

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

By analyzing existing cross correlation between Sena Development Public and Bhiraj Office Leasehold, you can compare the effects of market volatilities on Sena Development and Bhiraj Office 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 Sena Development with a short position of Bhiraj Office. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sena Development and Bhiraj Office.

Diversification Opportunities for Sena Development and Bhiraj Office

-0.36

Correlation Coefficient

Sena Development  Bhiraj Office

Very good diversification

The 3 months correlation between Sena and Bhiraj is -0.36. Overlapping area represents the amount of risk that can be diversified away by holding Sena Development Public and Bhiraj Office Leasehold in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bhiraj Office Leasehold and Sena Development 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 Sena Development Public are associated (or correlated) with Bhiraj Office. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bhiraj Office Leasehold has no effect on the direction of Sena Development i.e., Sena Development and Bhiraj Office go up and down completely randomly.

Pair Corralation between Sena Development and Bhiraj Office

Assuming the 90 days trading horizon Sena Development Public is expected to under-perform the Bhiraj Office. But the stock apears to be less risky and, when comparing its historical volatility, Sena Development Public is 1.5 times less risky than Bhiraj Office. The stock trades about -0.13 of its potential returns per unit of risk. The Bhiraj Office Leasehold is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest  490.00  in Bhiraj Office Leasehold on September 17, 2024 and sell it today you would earn a total of  35.00  from holding Bhiraj Office Leasehold or generate 7.14% return on investment over 90 days.

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

Sena Development Public  vs.  Bhiraj Office Leasehold

Sena Development Public

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Sena Development Public has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest unsteady performance, the Stock's forward-looking signals remain persistent and the latest mess on Wall Street may also be a sign of long-standing gains for the company institutional investors.

Bhiraj Office Leasehold

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Bhiraj Office Leasehold are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of rather weak technical and fundamental indicators, Bhiraj Office may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Sena Development and Bhiraj Office

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

The idea behind Sena Development Public and Bhiraj Office Leasehold 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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.