Correlation Between Bonny Worldwide and Aces Electronics
Can any of the company-specific risk be diversified away by investing in both Bonny Worldwide and Aces Electronics 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 Bonny Worldwide and Aces Electronics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Bonny Worldwide and Aces Electronics Co, you can compare the effects of market volatilities on Bonny Worldwide and Aces Electronics 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 Bonny Worldwide with a short position of Aces Electronics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bonny Worldwide and Aces Electronics.
Diversification Opportunities for Bonny Worldwide and Aces Electronics
-0.38 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Bonny and Aces is -0.38. Overlapping area represents the amount of risk that can be diversified away by holding Bonny Worldwide and Aces Electronics Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aces Electronics and Bonny Worldwide 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 Bonny Worldwide are associated (or correlated) with Aces Electronics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aces Electronics has no effect on the direction of Bonny Worldwide i.e., Bonny Worldwide and Aces Electronics go up and down completely randomly.
Pair Corralation between Bonny Worldwide and Aces Electronics
Assuming the 90 days trading horizon Bonny Worldwide is expected to generate 2.27 times more return on investment than Aces Electronics. However, Bonny Worldwide is 2.27 times more volatile than Aces Electronics Co. It trades about -0.11 of its potential returns per unit of risk. Aces Electronics Co is currently generating about -0.32 per unit of risk. If you would invest 31,950 in Bonny Worldwide on October 12, 2024 and sell it today you would lose (2,850) from holding Bonny Worldwide or give up 8.92% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bonny Worldwide vs. Aces Electronics Co
Performance |
| Timeline |
| Bonny Worldwide |
| Aces Electronics |
Bonny Worldwide and Aces Electronics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bonny Worldwide and Aces Electronics
The main advantage of trading using opposite Bonny Worldwide and Aces Electronics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bonny Worldwide position performs unexpectedly, Aces Electronics 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 Aces Electronics will offset losses from the drop in Aces Electronics' long position.| Bonny Worldwide vs. Paiho Shih Holdings | Bonny Worldwide vs. Thunder Tiger Corp | Bonny Worldwide vs. Feng Tay Enterprises | Bonny Worldwide vs. Sinyi Realty |
| Aces Electronics vs. Chant Sincere Co | Aces Electronics vs. Altek Corp | Aces Electronics vs. Jentech Precision Industrial | Aces Electronics vs. Lotes 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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
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