Correlation Between BGF Retail and DSC Investment
Can any of the company-specific risk be diversified away by investing in both BGF Retail and DSC Investment 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 DSC Investment 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 DSC Investment, you can compare the effects of market volatilities on BGF Retail and DSC Investment 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 DSC Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of BGF Retail and DSC Investment.
Diversification Opportunities for BGF Retail and DSC Investment
0.16 | Correlation Coefficient |
Average diversification
The 3 months correlation between BGF and DSC is 0.16. Overlapping area represents the amount of risk that can be diversified away by holding BGF Retail Co and DSC Investment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on DSC Investment 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 DSC Investment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of DSC Investment has no effect on the direction of BGF Retail i.e., BGF Retail and DSC Investment go up and down completely randomly.
Pair Corralation between BGF Retail and DSC Investment
Assuming the 90 days trading horizon BGF Retail Co is expected to under-perform the DSC Investment. But the stock apears to be less risky and, when comparing its historical volatility, BGF Retail Co is 1.43 times less risky than DSC Investment. The stock trades about -0.06 of its potential returns per unit of risk. The DSC Investment is currently generating about 0.0 of returns per unit of risk over similar time horizon. If you would invest 354,300 in DSC Investment on September 28, 2024 and sell it today you would lose (67,800) from holding DSC Investment or give up 19.14% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
BGF Retail Co vs. DSC Investment
Performance |
| Timeline |
| BGF Retail |
| DSC Investment |
BGF Retail and DSC Investment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BGF Retail and DSC Investment
The main advantage of trading using opposite BGF Retail and DSC Investment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BGF Retail position performs unexpectedly, DSC Investment 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 DSC Investment will offset losses from the drop in DSC Investment's long position.| BGF Retail vs. Woori Financial Group | BGF Retail vs. Jb Financial | BGF Retail vs. Nh Investment And | BGF Retail vs. Kumho Petro Chemical |
| DSC Investment vs. BGF Retail Co | DSC Investment vs. Namhwa Industrial Co | DSC Investment vs. E Investment Development | DSC Investment vs. DB Financial Investment |
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 CEOs Directory module to screen CEOs from public companies around the world.
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