Correlation Between Bayport International and Wharf Holdings
Can any of the company-specific risk be diversified away by investing in both Bayport International and Wharf Holdings 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 Bayport International and Wharf Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Bayport International Holdings and Wharf Holdings, you can compare the effects of market volatilities on Bayport International and Wharf Holdings 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 Bayport International with a short position of Wharf Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bayport International and Wharf Holdings.
Diversification Opportunities for Bayport International and Wharf Holdings
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Bayport and Wharf is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Bayport International Holdings and Wharf Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Wharf Holdings and Bayport International 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 Bayport International Holdings are associated (or correlated) with Wharf Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Wharf Holdings has no effect on the direction of Bayport International i.e., Bayport International and Wharf Holdings go up and down completely randomly.
Pair Corralation between Bayport International and Wharf Holdings
Given the investment horizon of 90 days Bayport International Holdings is expected to generate 31.25 times more return on investment than Wharf Holdings. However, Bayport International is 31.25 times more volatile than Wharf Holdings. It trades about 0.08 of its potential returns per unit of risk. Wharf Holdings is currently generating about 0.04 per unit of risk. If you would invest 1.01 in Bayport International Holdings on August 25, 2024 and sell it today you would lose (0.98) from holding Bayport International Holdings or give up 97.03% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 93.79% |
| Values | Daily Returns |
Bayport International Holdings vs. Wharf Holdings
Performance |
| Timeline |
| Bayport International |
| Wharf Holdings |
Bayport International and Wharf Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bayport International and Wharf Holdings
The main advantage of trading using opposite Bayport International and Wharf Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bayport International position performs unexpectedly, Wharf Holdings 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 Wharf Holdings will offset losses from the drop in Wharf Holdings' long position.| Bayport International vs. Sun Hung Kai | Bayport International vs. Sun Hung Kai | Bayport International vs. China Resources Land | Bayport International vs. China Resources Land |
| Wharf Holdings vs. Sun Hung Kai | Wharf Holdings vs. Sun Hung Kai | Wharf Holdings vs. China Resources Land | Wharf Holdings vs. China Resources Land |
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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
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