Correlation Between BES Engineering and Kedge Construction
Can any of the company-specific risk be diversified away by investing in both BES Engineering and Kedge Construction 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 BES Engineering and Kedge Construction into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between BES Engineering Co and Kedge Construction Co, you can compare the effects of market volatilities on BES Engineering and Kedge Construction 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 BES Engineering with a short position of Kedge Construction. Check out your portfolio center. Please also check ongoing floating volatility patterns of BES Engineering and Kedge Construction.
Diversification Opportunities for BES Engineering and Kedge Construction
0.7 | Correlation Coefficient |
Poor diversification
The 3 months correlation between BES and Kedge is 0.7. Overlapping area represents the amount of risk that can be diversified away by holding BES Engineering Co and Kedge Construction Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kedge Construction and BES Engineering 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 BES Engineering Co are associated (or correlated) with Kedge Construction. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kedge Construction has no effect on the direction of BES Engineering i.e., BES Engineering and Kedge Construction go up and down completely randomly.
Pair Corralation between BES Engineering and Kedge Construction
Assuming the 90 days trading horizon BES Engineering Co is expected to generate 1.68 times more return on investment than Kedge Construction. However, BES Engineering is 1.68 times more volatile than Kedge Construction Co. It trades about 0.1 of its potential returns per unit of risk. Kedge Construction Co is currently generating about 0.16 per unit of risk. If you would invest 1,085 in BES Engineering Co on September 1, 2024 and sell it today you would earn a total of 40.00 from holding BES Engineering Co or generate 3.69% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
BES Engineering Co vs. Kedge Construction Co
Performance |
| Timeline |
| BES Engineering |
| Kedge Construction |
BES Engineering and Kedge Construction Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BES Engineering and Kedge Construction
The main advantage of trading using opposite BES Engineering and Kedge Construction positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BES Engineering position performs unexpectedly, Kedge Construction 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 Kedge Construction will offset losses from the drop in Kedge Construction's long position.| BES Engineering vs. Hung Sheng Construction | BES Engineering vs. Taiwan Glass Ind | BES Engineering vs. China Petrochemical Development | BES Engineering vs. Taiwan Tea Corp |
| Kedge Construction vs. BES Engineering Co | Kedge Construction vs. Continental Holdings Corp | Kedge Construction vs. Kee Tai Properties | Kedge Construction vs. Hung Sheng Construction |
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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
Other Complementary Tools
| Idea Analyzer Analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas | |
| Volatility Analysis Get historical volatility and risk analysis based on latest market data | |
| Portfolio Dashboard Portfolio dashboard that provides centralized access to all your investments | |
| Idea Breakdown Analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes | |
| Balance Of Power Check stock momentum by analyzing Balance Of Power indicator and other technical ratios |