Correlation Between ECM Libra and BP Plastics
Can any of the company-specific risk be diversified away by investing in both ECM Libra and BP Plastics 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 ECM Libra and BP Plastics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ECM Libra Financial and BP Plastics Holding, you can compare the effects of market volatilities on ECM Libra and BP Plastics 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 ECM Libra with a short position of BP Plastics. Check out your portfolio center. Please also check ongoing floating volatility patterns of ECM Libra and BP Plastics.
Diversification Opportunities for ECM Libra and BP Plastics
0.29 | Correlation Coefficient |
Modest diversification
The 3 months correlation between ECM and 5100 is 0.29. Overlapping area represents the amount of risk that can be diversified away by holding ECM Libra Financial and BP Plastics Holding in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BP Plastics Holding and ECM Libra 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 ECM Libra Financial are associated (or correlated) with BP Plastics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BP Plastics Holding has no effect on the direction of ECM Libra i.e., ECM Libra and BP Plastics go up and down completely randomly.
Pair Corralation between ECM Libra and BP Plastics
Assuming the 90 days trading horizon ECM Libra Financial is expected to under-perform the BP Plastics. In addition to that, ECM Libra is 4.02 times more volatile than BP Plastics Holding. It trades about -0.17 of its total potential returns per unit of risk. BP Plastics Holding is currently generating about -0.06 per unit of volatility. If you would invest 123.00 in BP Plastics Holding on November 4, 2024 and sell it today you would lose (1.00) from holding BP Plastics Holding or give up 0.81% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 95.0% |
| Values | Daily Returns |
ECM Libra Financial vs. BP Plastics Holding
Performance |
| Timeline |
| ECM Libra Financial |
| BP Plastics Holding |
ECM Libra and BP Plastics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ECM Libra and BP Plastics
The main advantage of trading using opposite ECM Libra and BP Plastics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ECM Libra position performs unexpectedly, BP Plastics 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 BP Plastics will offset losses from the drop in BP Plastics' long position.| ECM Libra vs. Tex Cycle Technology | ECM Libra vs. SSF Home Group | ECM Libra vs. Cloudpoint Technology Berhad | ECM Libra vs. Cosmos Technology International |
| BP Plastics vs. Apex Healthcare Bhd | BP Plastics vs. Sports Toto Berhad | BP Plastics vs. Al Aqar Healthcare | BP Plastics vs. RHB Bank Bhd |
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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
Other Complementary Tools
| Portfolio Holdings Check your current holdings and cash postion to detemine if your portfolio needs rebalancing | |
| Insider Screener Find insiders across different sectors to evaluate their impact on performance | |
| Performance Analysis Check effects of mean-variance optimization against your current asset allocation | |
| Global Markets Map Get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes | |
| Fundamentals Comparison Compare fundamentals across multiple equities to find investing opportunities |