Correlation Between BGF Retail and Eagle Veterinary
Can any of the company-specific risk be diversified away by investing in both BGF Retail and Eagle Veterinary 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 BGF Retail and Eagle Veterinary into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between BGF Retail Co and Eagle Veterinary Technology, you can compare the effects of market volatilities on BGF Retail and Eagle Veterinary 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 BGF Retail with a short position of Eagle Veterinary. Check out your portfolio center. Please also check ongoing floating volatility patterns of BGF Retail and Eagle Veterinary.
Diversification Opportunities for BGF Retail and Eagle Veterinary
0.77 | Correlation Coefficient |
Poor diversification
The 3 months correlation between BGF and Eagle is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding BGF Retail Co and Eagle Veterinary Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Eagle Veterinary Tec and BGF Retail 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 BGF Retail Co are associated (or correlated) with Eagle Veterinary. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Eagle Veterinary Tec has no effect on the direction of BGF Retail i.e., BGF Retail and Eagle Veterinary go up and down completely randomly.
Pair Corralation between BGF Retail and Eagle Veterinary
Assuming the 90 days trading horizon BGF Retail Co is expected to under-perform the Eagle Veterinary. In addition to that, BGF Retail is 1.1 times more volatile than Eagle Veterinary Technology. It trades about -0.02 of its total potential returns per unit of risk. Eagle Veterinary Technology is currently generating about 0.27 per unit of volatility. If you would invest 458,634 in Eagle Veterinary Technology on October 14, 2024 and sell it today you would earn a total of 35,366 from holding Eagle Veterinary Technology or generate 7.71% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
BGF Retail Co vs. Eagle Veterinary Technology
Performance |
| Timeline |
| BGF Retail |
| Eagle Veterinary Tec |
BGF Retail and Eagle Veterinary Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BGF Retail and Eagle Veterinary
The main advantage of trading using opposite BGF Retail and Eagle Veterinary positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BGF Retail position performs unexpectedly, Eagle Veterinary 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 Eagle Veterinary will offset losses from the drop in Eagle Veterinary's long position.| BGF Retail vs. Seers Technology | BGF Retail vs. Samwha Electronics Co | BGF Retail vs. Bosung Power Technology | BGF Retail vs. SungMoon Electronics Co |
| Eagle Veterinary vs. Dongnam Chemical Co | Eagle Veterinary vs. Worldex Industry Trading | Eagle Veterinary vs. Youngbo Chemical Co | Eagle Veterinary vs. BGF Retail 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..
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