Correlation Between BP Plastics and Uwc Bhd
Can any of the company-specific risk be diversified away by investing in both BP Plastics and Uwc Bhd 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 BP Plastics and Uwc Bhd into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between BP Plastics Holding and Uwc Bhd, you can compare the effects of market volatilities on BP Plastics and Uwc Bhd 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 BP Plastics with a short position of Uwc Bhd. Check out your portfolio center. Please also check ongoing floating volatility patterns of BP Plastics and Uwc Bhd.
Diversification Opportunities for BP Plastics and Uwc Bhd
-0.07 | Correlation Coefficient |
Good diversification
The 3 months correlation between 5100 and Uwc is -0.07. Overlapping area represents the amount of risk that can be diversified away by holding BP Plastics Holding and Uwc Bhd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Uwc Bhd and BP Plastics 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 BP Plastics Holding are associated (or correlated) with Uwc Bhd. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Uwc Bhd has no effect on the direction of BP Plastics i.e., BP Plastics and Uwc Bhd go up and down completely randomly.
Pair Corralation between BP Plastics and Uwc Bhd
Assuming the 90 days trading horizon BP Plastics is expected to generate 12.72 times less return on investment than Uwc Bhd. But when comparing it to its historical volatility, BP Plastics Holding is 2.24 times less risky than Uwc Bhd. It trades about 0.06 of its potential returns per unit of risk. Uwc Bhd is currently generating about 0.36 of returns per unit of risk over similar time horizon. If you would invest 222.00 in Uwc Bhd on August 28, 2024 and sell it today you would earn a total of 56.00 from holding Uwc Bhd or generate 25.23% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
BP Plastics Holding vs. Uwc Bhd
Performance |
| Timeline |
| BP Plastics Holding |
| Uwc Bhd |
BP Plastics and Uwc Bhd Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BP Plastics and Uwc Bhd
The main advantage of trading using opposite BP Plastics and Uwc Bhd positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BP Plastics position performs unexpectedly, Uwc Bhd 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 Uwc Bhd will offset losses from the drop in Uwc Bhd's long position.| BP Plastics vs. Aurelius Technologies Bhd | BP Plastics vs. FARM FRESH BERHAD | BP Plastics vs. Nova Wellness Group | BP Plastics vs. Magni Tech Industries |
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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
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