Correlation Between BROADWIND ENRGY and STORE ELECTRONIC
Can any of the company-specific risk be diversified away by investing in both BROADWIND ENRGY and STORE ELECTRONIC 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 BROADWIND ENRGY and STORE ELECTRONIC into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between BROADWIND ENRGY and STORE ELECTRONIC, you can compare the effects of market volatilities on BROADWIND ENRGY and STORE ELECTRONIC 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 BROADWIND ENRGY with a short position of STORE ELECTRONIC. Check out your portfolio center. Please also check ongoing floating volatility patterns of BROADWIND ENRGY and STORE ELECTRONIC.
Diversification Opportunities for BROADWIND ENRGY and STORE ELECTRONIC
0.57 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between BROADWIND and STORE is 0.57. Overlapping area represents the amount of risk that can be diversified away by holding BROADWIND ENRGY and STORE ELECTRONIC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on STORE ELECTRONIC and BROADWIND ENRGY 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 BROADWIND ENRGY are associated (or correlated) with STORE ELECTRONIC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of STORE ELECTRONIC has no effect on the direction of BROADWIND ENRGY i.e., BROADWIND ENRGY and STORE ELECTRONIC go up and down completely randomly.
Pair Corralation between BROADWIND ENRGY and STORE ELECTRONIC
Assuming the 90 days trading horizon BROADWIND ENRGY is expected to under-perform the STORE ELECTRONIC. In addition to that, BROADWIND ENRGY is 1.02 times more volatile than STORE ELECTRONIC. It trades about -0.02 of its total potential returns per unit of risk. STORE ELECTRONIC is currently generating about 0.03 per unit of volatility. If you would invest 12,452 in STORE ELECTRONIC on September 3, 2024 and sell it today you would earn a total of 1,568 from holding STORE ELECTRONIC or generate 12.59% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
BROADWIND ENRGY vs. STORE ELECTRONIC
Performance |
| Timeline |
| BROADWIND ENRGY |
| STORE ELECTRONIC |
BROADWIND ENRGY and STORE ELECTRONIC Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BROADWIND ENRGY and STORE ELECTRONIC
The main advantage of trading using opposite BROADWIND ENRGY and STORE ELECTRONIC positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BROADWIND ENRGY position performs unexpectedly, STORE ELECTRONIC 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 STORE ELECTRONIC will offset losses from the drop in STORE ELECTRONIC's long position.| BROADWIND ENRGY vs. TOTAL GABON | BROADWIND ENRGY vs. Walgreens Boots Alliance | BROADWIND ENRGY vs. Peak Resources Limited |
| STORE ELECTRONIC vs. TOTAL GABON | STORE ELECTRONIC vs. Walgreens Boots Alliance | STORE ELECTRONIC vs. Peak Resources Limited |
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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
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