Correlation Between BHI and GiantStep
Can any of the company-specific risk be diversified away by investing in both BHI and GiantStep 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 BHI and GiantStep into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between BHI Co and GiantStep Co, you can compare the effects of market volatilities on BHI and GiantStep 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 BHI with a short position of GiantStep. Check out your portfolio center. Please also check ongoing floating volatility patterns of BHI and GiantStep.
Diversification Opportunities for BHI and GiantStep
Very good diversification
The 3 months correlation between BHI and GiantStep is -0.36. Overlapping area represents the amount of risk that can be diversified away by holding BHI Co and GiantStep Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GiantStep and BHI 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 BHI Co are associated (or correlated) with GiantStep. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GiantStep has no effect on the direction of BHI i.e., BHI and GiantStep go up and down completely randomly.
Pair Corralation between BHI and GiantStep
Assuming the 90 days trading horizon BHI Co is expected to generate 1.13 times more return on investment than GiantStep. However, BHI is 1.13 times more volatile than GiantStep Co. It trades about 0.23 of its potential returns per unit of risk. GiantStep Co is currently generating about 0.0 per unit of risk. If you would invest 804,000 in BHI Co on November 2, 2024 and sell it today you would earn a total of 1,546,000 from holding BHI Co or generate 192.29% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
BHI Co vs. GiantStep Co
Performance |
| Timeline |
| BHI Co |
| GiantStep |
BHI and GiantStep Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BHI and GiantStep
The main advantage of trading using opposite BHI and GiantStep positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BHI position performs unexpectedly, GiantStep 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 GiantStep will offset losses from the drop in GiantStep's long position.| BHI vs. Samsung Electronics Co | BHI vs. Samsung Electronics Co | BHI vs. KB Financial Group | BHI vs. Shinhan Financial Group |
| GiantStep vs. HYBE Co | GiantStep vs. NH SPAC 8 | GiantStep vs. Wysiwyg Studios Co | GiantStep vs. RaemongRaein Co |
Check out your portfolio center.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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
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