Correlation Between BCB Bancorp and Bright Scholar
Can any of the company-specific risk be diversified away by investing in both BCB Bancorp and Bright Scholar 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 BCB Bancorp and Bright Scholar into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between BCB Bancorp and Bright Scholar Education, you can compare the effects of market volatilities on BCB Bancorp and Bright Scholar 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 BCB Bancorp with a short position of Bright Scholar. Check out your portfolio center. Please also check ongoing floating volatility patterns of BCB Bancorp and Bright Scholar.
Diversification Opportunities for BCB Bancorp and Bright Scholar
-0.4 | Correlation Coefficient |
Very good diversification
The 3 months correlation between BCB and Bright is -0.4. Overlapping area represents the amount of risk that can be diversified away by holding BCB Bancorp and Bright Scholar Education in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bright Scholar Education and BCB Bancorp 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 BCB Bancorp are associated (or correlated) with Bright Scholar. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bright Scholar Education has no effect on the direction of BCB Bancorp i.e., BCB Bancorp and Bright Scholar go up and down completely randomly.
Pair Corralation between BCB Bancorp and Bright Scholar
Given the investment horizon of 90 days BCB Bancorp is expected to generate 0.73 times more return on investment than Bright Scholar. However, BCB Bancorp is 1.36 times less risky than Bright Scholar. It trades about 0.19 of its potential returns per unit of risk. Bright Scholar Education is currently generating about 0.0 per unit of risk. If you would invest 1,219 in BCB Bancorp on August 31, 2024 and sell it today you would earn a total of 105.00 from holding BCB Bancorp or generate 8.61% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
BCB Bancorp vs. Bright Scholar Education
Performance |
| Timeline |
| BCB Bancorp |
| Bright Scholar Education |
BCB Bancorp and Bright Scholar Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BCB Bancorp and Bright Scholar
The main advantage of trading using opposite BCB Bancorp and Bright Scholar positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BCB Bancorp position performs unexpectedly, Bright Scholar 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 Bright Scholar will offset losses from the drop in Bright Scholar's long position.| BCB Bancorp vs. Provident Financial Services | BCB Bancorp vs. First Mid Illinois | BCB Bancorp vs. ConnectOne Bancorp | BCB Bancorp vs. Finward Bancorp |
| Bright Scholar vs. Lincoln Educational Services | Bright Scholar vs. Aquagold International | Bright Scholar vs. Thrivent High Yield | Bright Scholar vs. Morningstar Unconstrained Allocation |
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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