Correlation Between BP Plastics and Duopharma Biotech
Can any of the company-specific risk be diversified away by investing in both BP Plastics and Duopharma Biotech 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 Duopharma Biotech 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 Duopharma Biotech Bhd, you can compare the effects of market volatilities on BP Plastics and Duopharma Biotech 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 Duopharma Biotech. Check out your portfolio center. Please also check ongoing floating volatility patterns of BP Plastics and Duopharma Biotech.
Diversification Opportunities for BP Plastics and Duopharma Biotech
-0.29 | Correlation Coefficient |
Very good diversification
The 3 months correlation between 5100 and Duopharma is -0.29. Overlapping area represents the amount of risk that can be diversified away by holding BP Plastics Holding and Duopharma Biotech Bhd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Duopharma Biotech 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 Duopharma Biotech. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Duopharma Biotech Bhd has no effect on the direction of BP Plastics i.e., BP Plastics and Duopharma Biotech go up and down completely randomly.
Pair Corralation between BP Plastics and Duopharma Biotech
Assuming the 90 days trading horizon BP Plastics Holding is expected to under-perform the Duopharma Biotech. But the stock apears to be less risky and, when comparing its historical volatility, BP Plastics Holding is 1.08 times less risky than Duopharma Biotech. The stock trades about -0.05 of its potential returns per unit of risk. The Duopharma Biotech Bhd is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 121.00 in Duopharma Biotech Bhd on September 1, 2024 and sell it today you would earn a total of 2.00 from holding Duopharma Biotech Bhd or generate 1.65% 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. Duopharma Biotech Bhd
Performance |
| Timeline |
| BP Plastics Holding |
| Duopharma Biotech Bhd |
BP Plastics and Duopharma Biotech Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BP Plastics and Duopharma Biotech
The main advantage of trading using opposite BP Plastics and Duopharma Biotech positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BP Plastics position performs unexpectedly, Duopharma Biotech 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 Duopharma Biotech will offset losses from the drop in Duopharma Biotech's long position.| BP Plastics vs. Press Metal Bhd | BP Plastics vs. Central Industrial Corp | BP Plastics vs. Cosmos Technology International | BP Plastics vs. Binasat Communications Bhd |
| Duopharma Biotech vs. Digistar Bhd | Duopharma Biotech vs. Minetech Resources Bhd | Duopharma Biotech vs. Swift Haulage Bhd | Duopharma Biotech vs. Bina Darulaman Bhd |
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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