Correlation Between BGF Retail and NewFlex Technology
Can any of the company-specific risk be diversified away by investing in both BGF Retail and NewFlex Technology 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 NewFlex Technology 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 NewFlex Technology Co, you can compare the effects of market volatilities on BGF Retail and NewFlex Technology 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 NewFlex Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of BGF Retail and NewFlex Technology.
Diversification Opportunities for BGF Retail and NewFlex Technology
0.12 | Correlation Coefficient |
Average diversification
The 3 months correlation between BGF and NewFlex is 0.12. Overlapping area represents the amount of risk that can be diversified away by holding BGF Retail Co and NewFlex Technology Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NewFlex Technology 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 NewFlex Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NewFlex Technology has no effect on the direction of BGF Retail i.e., BGF Retail and NewFlex Technology go up and down completely randomly.
Pair Corralation between BGF Retail and NewFlex Technology
Assuming the 90 days trading horizon BGF Retail Co is expected to generate 0.32 times more return on investment than NewFlex Technology. However, BGF Retail Co is 3.17 times less risky than NewFlex Technology. It trades about 0.09 of its potential returns per unit of risk. NewFlex Technology Co is currently generating about -0.1 per unit of risk. If you would invest 10,150,000 in BGF Retail Co on November 3, 2024 and sell it today you would earn a total of 210,000 from holding BGF Retail Co or generate 2.07% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
BGF Retail Co vs. NewFlex Technology Co
Performance |
| Timeline |
| BGF Retail |
| NewFlex Technology |
BGF Retail and NewFlex Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BGF Retail and NewFlex Technology
The main advantage of trading using opposite BGF Retail and NewFlex Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BGF Retail position performs unexpectedly, NewFlex Technology 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 NewFlex Technology will offset losses from the drop in NewFlex Technology's long position.| BGF Retail vs. Cuckoo Electronics Co | BGF Retail vs. Miwon Chemicals Co | BGF Retail vs. Daejoo Electronic Materials | BGF Retail vs. ABCO Electronics Co |
| NewFlex Technology vs. Nice Information Telecommunication | NewFlex Technology vs. MEDIANA CoLtd | NewFlex Technology vs. Next Entertainment World | NewFlex Technology vs. Daewon Media 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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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