Correlation Between Broadpeak and Bd Multimedia
Can any of the company-specific risk be diversified away by investing in both Broadpeak and Bd Multimedia 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 Broadpeak and Bd Multimedia into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Broadpeak SA and Bd Multimedia, you can compare the effects of market volatilities on Broadpeak and Bd Multimedia 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 Broadpeak with a short position of Bd Multimedia. Check out your portfolio center. Please also check ongoing floating volatility patterns of Broadpeak and Bd Multimedia.
Diversification Opportunities for Broadpeak and Bd Multimedia
0.77 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Broadpeak and ALBDM is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding Broadpeak SA and Bd Multimedia in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bd Multimedia and Broadpeak 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 Broadpeak SA are associated (or correlated) with Bd Multimedia. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bd Multimedia has no effect on the direction of Broadpeak i.e., Broadpeak and Bd Multimedia go up and down completely randomly.
Pair Corralation between Broadpeak and Bd Multimedia
Assuming the 90 days trading horizon Broadpeak SA is expected to under-perform the Bd Multimedia. But the stock apears to be less risky and, when comparing its historical volatility, Broadpeak SA is 2.23 times less risky than Bd Multimedia. The stock trades about -0.12 of its potential returns per unit of risk. The Bd Multimedia is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 158.00 in Bd Multimedia on August 26, 2024 and sell it today you would lose (28.00) from holding Bd Multimedia or give up 17.72% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 99.8% |
| Values | Daily Returns |
Broadpeak SA vs. Bd Multimedia
Performance |
| Timeline |
| Broadpeak SA |
| Bd Multimedia |
Broadpeak and Bd Multimedia Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Broadpeak and Bd Multimedia
The main advantage of trading using opposite Broadpeak and Bd Multimedia positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Broadpeak position performs unexpectedly, Bd Multimedia 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 Bd Multimedia will offset losses from the drop in Bd Multimedia's long position.| Broadpeak vs. Piscines Desjoyaux SA | Broadpeak vs. Groupe Guillin SA | Broadpeak vs. Passat Socit Anonyme | Broadpeak vs. Grard Perrier Industrie |
| Bd Multimedia vs. Sartorius Stedim Biotech | Bd Multimedia vs. Lectra SA | Bd Multimedia vs. Teleperformance SE | Bd Multimedia vs. Trigano SA |
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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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