Correlation Between Balkrishna Industries and Container

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

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

Diversification Opportunities for Balkrishna Industries and Container

-0.48

Correlation Coefficient

Balkrishna Industries  Container

Very good diversification

The 3 months correlation between Balkrishna and Container is -0.48. Overlapping area represents the amount of risk that can be diversified away by holding Balkrishna Industries Limited and Container of in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Container and Balkrishna 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 Balkrishna Industries Limited are associated (or correlated) with Container. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Container has no effect on the direction of Balkrishna Industries i.e., Balkrishna Industries and Container go up and down completely randomly.

Pair Corralation between Balkrishna Industries and Container

Assuming the 90 days trading horizon Balkrishna Industries Limited is expected to generate 0.76 times more return on investment than Container. However, Balkrishna Industries Limited is 1.31 times less risky than Container. It trades about 0.1 of its potential returns per unit of risk. Container of is currently generating about 0.07 per unit of risk. If you would invest  252,287  in Balkrishna Industries Limited on April 21, 2025 and sell it today you would earn a total of  22,243  from holding Balkrishna Industries Limited or generate 8.82% return on investment over 90 days.

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

Balkrishna Industries Limited  vs.  Container of

Balkrishna Industries

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Balkrishna Industries Limited are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain forward indicators, Balkrishna Industries may actually be approaching a critical reversion point that can send shares even higher in August 2025.

Container

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Container of are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite somewhat unfluctuating fundamental indicators, Container may actually be approaching a critical reversion point that can send shares even higher in August 2025.

Pair Trading with Balkrishna Industries and Container

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

The idea behind Balkrishna Industries Limited and Container of 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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.