Correlation Between BGF Retail and THiRA UTECH
Can any of the company-specific risk be diversified away by investing in both BGF Retail and THiRA UTECH 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 THiRA UTECH 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 THiRA UTECH LTD, you can compare the effects of market volatilities on BGF Retail and THiRA UTECH 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 THiRA UTECH. Check out your portfolio center. Please also check ongoing floating volatility patterns of BGF Retail and THiRA UTECH.
Diversification Opportunities for BGF Retail and THiRA UTECH
0.54 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between BGF and THiRA is 0.54. Overlapping area represents the amount of risk that can be diversified away by holding BGF Retail Co and THiRA UTECH LTD in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on THiRA UTECH LTD 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 THiRA UTECH. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of THiRA UTECH LTD has no effect on the direction of BGF Retail i.e., BGF Retail and THiRA UTECH go up and down completely randomly.
Pair Corralation between BGF Retail and THiRA UTECH
Assuming the 90 days trading horizon BGF Retail is expected to generate 3.53 times less return on investment than THiRA UTECH. But when comparing it to its historical volatility, BGF Retail Co is 1.97 times less risky than THiRA UTECH. It trades about 0.09 of its potential returns per unit of risk. THiRA UTECH LTD is currently generating about 0.16 of returns per unit of risk over similar time horizon. If you would invest 526,000 in THiRA UTECH LTD on November 3, 2024 and sell it today you would earn a total of 37,000 from holding THiRA UTECH LTD or generate 7.03% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 94.74% |
| Values | Daily Returns |
BGF Retail Co vs. THiRA UTECH LTD
Performance |
| Timeline |
| BGF Retail |
| THiRA UTECH LTD |
BGF Retail and THiRA UTECH Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BGF Retail and THiRA UTECH
The main advantage of trading using opposite BGF Retail and THiRA UTECH positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BGF Retail position performs unexpectedly, THiRA UTECH 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 THiRA UTECH will offset losses from the drop in THiRA UTECH'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 |
| THiRA UTECH vs. Leaders Technology Investment | THiRA UTECH vs. LB Investment | THiRA UTECH vs. Kukil Metal Co | THiRA UTECH vs. Hyunwoo Industrial 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 Stocks Directory module to find actively traded stocks across global markets.
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