Correlation Between BES Engineering and Acter
Can any of the company-specific risk be diversified away by investing in both BES Engineering and Acter 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 Acter 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 Acter Co, you can compare the effects of market volatilities on BES Engineering and Acter 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 Acter. Check out your portfolio center. Please also check ongoing floating volatility patterns of BES Engineering and Acter.
Diversification Opportunities for BES Engineering and Acter
-0.55 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between BES and Acter is -0.55. Overlapping area represents the amount of risk that can be diversified away by holding BES Engineering Co and Acter Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Acter 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 Acter. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Acter has no effect on the direction of BES Engineering i.e., BES Engineering and Acter go up and down completely randomly.
Pair Corralation between BES Engineering and Acter
Assuming the 90 days trading horizon BES Engineering Co is expected to generate 0.72 times more return on investment than Acter. However, BES Engineering Co is 1.4 times less risky than Acter. It trades about 0.1 of its potential returns per unit of risk. Acter Co is currently generating about -0.21 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 Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
BES Engineering Co vs. Acter Co
Performance |
| Timeline |
| BES Engineering |
| Acter |
BES Engineering and Acter Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BES Engineering and Acter
The main advantage of trading using opposite BES Engineering and Acter positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BES Engineering position performs unexpectedly, Acter 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 Acter will offset losses from the drop in Acter'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 |
| Acter vs. United Integrated Services | Acter vs. Topco Scientific Co | Acter vs. Nova Technology | Acter vs. Simplo Technology 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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
Other Complementary Tools
| Latest Portfolios Quick portfolio dashboard that showcases your latest portfolios | |
| Global Markets Map Get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes | |
| Portfolio Center All portfolio management and optimization tools to improve performance of your portfolios | |
| Equity Search Search for actively traded equities including funds and ETFs from over 30 global markets | |
| Bollinger Bands Use Bollinger Bands indicator to analyze target price for a given investing horizon |