Correlation Between Broadpeak and Hitechpros
Can any of the company-specific risk be diversified away by investing in both Broadpeak and Hitechpros 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 Hitechpros into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Broadpeak SA and Hitechpros, you can compare the effects of market volatilities on Broadpeak and Hitechpros 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 Hitechpros. Check out your portfolio center. Please also check ongoing floating volatility patterns of Broadpeak and Hitechpros.
Diversification Opportunities for Broadpeak and Hitechpros
0.63 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Broadpeak and Hitechpros is 0.63. Overlapping area represents the amount of risk that can be diversified away by holding Broadpeak SA and Hitechpros in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hitechpros 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 Hitechpros. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hitechpros has no effect on the direction of Broadpeak i.e., Broadpeak and Hitechpros go up and down completely randomly.
Pair Corralation between Broadpeak and Hitechpros
Assuming the 90 days trading horizon Broadpeak SA is expected to generate 2.01 times more return on investment than Hitechpros. However, Broadpeak is 2.01 times more volatile than Hitechpros. It trades about 0.03 of its potential returns per unit of risk. Hitechpros is currently generating about 0.06 per unit of risk. If you would invest 98.00 in Broadpeak SA on October 23, 2024 and sell it today you would earn a total of 1.00 from holding Broadpeak SA or generate 1.02% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Broadpeak SA vs. Hitechpros
Performance |
| Timeline |
| Broadpeak SA |
| Hitechpros |
Broadpeak and Hitechpros Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Broadpeak and Hitechpros
The main advantage of trading using opposite Broadpeak and Hitechpros positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Broadpeak position performs unexpectedly, Hitechpros 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 Hitechpros will offset losses from the drop in Hitechpros' long position.| Broadpeak vs. Piscines Desjoyaux SA | Broadpeak vs. Groupe Guillin SA | Broadpeak vs. Passat Socit Anonyme | Broadpeak vs. Grard Perrier Industrie |
| Hitechpros vs. Groupe Guillin SA | Hitechpros vs. Infotel SA | Hitechpros vs. Linedata Services SA | Hitechpros vs. Aubay Socit Anonyme |
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 Valuation module to check real value of public entities based on technical and fundamental data.
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