Correlation Between BCE and Bird Construction
Can any of the company-specific risk be diversified away by investing in both BCE and Bird Construction 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 BCE and Bird Construction into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between BCE Inc Pref and Bird Construction, you can compare the effects of market volatilities on BCE and Bird Construction 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 BCE with a short position of Bird Construction. Check out your portfolio center. Please also check ongoing floating volatility patterns of BCE and Bird Construction.
Diversification Opportunities for BCE and Bird Construction
-0.51 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between BCE and Bird is -0.51. Overlapping area represents the amount of risk that can be diversified away by holding BCE Inc Pref and Bird Construction in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bird Construction and BCE 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 BCE Inc Pref are associated (or correlated) with Bird Construction. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bird Construction has no effect on the direction of BCE i.e., BCE and Bird Construction go up and down completely randomly.
Pair Corralation between BCE and Bird Construction
Assuming the 90 days trading horizon BCE Inc Pref is expected to generate 0.21 times more return on investment than Bird Construction. However, BCE Inc Pref is 4.81 times less risky than Bird Construction. It trades about 0.37 of its potential returns per unit of risk. Bird Construction is currently generating about -0.12 per unit of risk. If you would invest 1,652 in BCE Inc Pref on November 3, 2024 and sell it today you would earn a total of 95.00 from holding BCE Inc Pref or generate 5.75% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
BCE Inc Pref vs. Bird Construction
Performance |
| Timeline |
| BCE Inc Pref |
| Bird Construction |
BCE and Bird Construction Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BCE and Bird Construction
The main advantage of trading using opposite BCE and Bird Construction positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BCE position performs unexpectedly, Bird Construction 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 Bird Construction will offset losses from the drop in Bird Construction's long position.| BCE vs. Oncolytics Biotech | BCE vs. Precious Metals And | BCE vs. Exco Technologies Limited | BCE vs. Element Fleet Management |
| Bird Construction vs. Slate Grocery REIT | Bird Construction vs. Aimia Inc | Bird Construction vs. Roots Corp | Bird Construction vs. Tucows Inc |
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 Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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