Correlation Between BFC Capital and Popular Capital
Can any of the company-specific risk be diversified away by investing in both BFC Capital and Popular Capital 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 BFC Capital and Popular Capital into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between BFC Capital Trust and Popular Capital Trust, you can compare the effects of market volatilities on BFC Capital and Popular Capital 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 BFC Capital with a short position of Popular Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of BFC Capital and Popular Capital.
Diversification Opportunities for BFC Capital and Popular Capital
0.39 | Correlation Coefficient |
Weak diversification
The 3 months correlation between BFC and Popular is 0.39. Overlapping area represents the amount of risk that can be diversified away by holding BFC Capital Trust and Popular Capital Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Popular Capital Trust and BFC Capital 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 BFC Capital Trust are associated (or correlated) with Popular Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Popular Capital Trust has no effect on the direction of BFC Capital i.e., BFC Capital and Popular Capital go up and down completely randomly.
Pair Corralation between BFC Capital and Popular Capital
Assuming the 90 days horizon BFC Capital is expected to generate 1.89 times less return on investment than Popular Capital. But when comparing it to its historical volatility, BFC Capital Trust is 1.15 times less risky than Popular Capital. It trades about 0.03 of its potential returns per unit of risk. Popular Capital Trust is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 2,318 in Popular Capital Trust on August 25, 2024 and sell it today you would earn a total of 238.00 from holding Popular Capital Trust or generate 10.27% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 97.39% |
| Values | Daily Returns |
BFC Capital Trust vs. Popular Capital Trust
Performance |
| Timeline |
| BFC Capital Trust |
| Popular Capital Trust |
BFC Capital and Popular Capital Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BFC Capital and Popular Capital
The main advantage of trading using opposite BFC Capital and Popular Capital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BFC Capital position performs unexpectedly, Popular Capital 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 Popular Capital will offset losses from the drop in Popular Capital's long position.| BFC Capital vs. Popular Capital Trust | BFC Capital vs. CHS Inc CN | BFC Capital vs. Wintrust Financial Corp | BFC Capital vs. Auburn National Bancorporation |
| Popular Capital vs. BFC Capital Trust | Popular Capital vs. Popular | Popular Capital vs. Oxford Lane Capital | Popular Capital vs. Wintrust Financial Corp |
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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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