Correlation Between BGF Retail and Echomarketing CoLtd
Can any of the company-specific risk be diversified away by investing in both BGF Retail and Echomarketing CoLtd 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 Echomarketing CoLtd 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 Echomarketing CoLtd, you can compare the effects of market volatilities on BGF Retail and Echomarketing CoLtd 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 Echomarketing CoLtd. Check out your portfolio center. Please also check ongoing floating volatility patterns of BGF Retail and Echomarketing CoLtd.
Diversification Opportunities for BGF Retail and Echomarketing CoLtd
0.46 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between BGF and Echomarketing is 0.46. Overlapping area represents the amount of risk that can be diversified away by holding BGF Retail Co and Echomarketing CoLtd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Echomarketing CoLtd 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 Echomarketing CoLtd. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Echomarketing CoLtd has no effect on the direction of BGF Retail i.e., BGF Retail and Echomarketing CoLtd go up and down completely randomly.
Pair Corralation between BGF Retail and Echomarketing CoLtd
Assuming the 90 days trading horizon BGF Retail Co is expected to generate 0.57 times more return on investment than Echomarketing CoLtd. However, BGF Retail Co is 1.76 times less risky than Echomarketing CoLtd. It trades about -0.12 of its potential returns per unit of risk. Echomarketing CoLtd is currently generating about -0.08 per unit of risk. If you would invest 11,630,000 in BGF Retail Co on August 25, 2024 and sell it today you would lose (830,000) from holding BGF Retail Co or give up 7.14% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
BGF Retail Co vs. Echomarketing CoLtd
Performance |
| Timeline |
| BGF Retail |
| Echomarketing CoLtd |
BGF Retail and Echomarketing CoLtd Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BGF Retail and Echomarketing CoLtd
The main advantage of trading using opposite BGF Retail and Echomarketing CoLtd positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BGF Retail position performs unexpectedly, Echomarketing CoLtd 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 Echomarketing CoLtd will offset losses from the drop in Echomarketing CoLtd's long position.| BGF Retail vs. AptaBio Therapeutics | BGF Retail vs. Daewoo SBI SPAC | BGF Retail vs. Dream Security co | BGF Retail vs. Microfriend |
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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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
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