Correlation Between BCE and Amentum Holdings
Can any of the company-specific risk be diversified away by investing in both BCE and Amentum 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 BCE and Amentum Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between BCE Inc and Amentum Holdings, you can compare the effects of market volatilities on BCE and Amentum 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 BCE with a short position of Amentum Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of BCE and Amentum Holdings.
Diversification Opportunities for BCE and Amentum Holdings
0.12 | Correlation Coefficient |
Average diversification
The 3 months correlation between BCE and Amentum is 0.12. Overlapping area represents the amount of risk that can be diversified away by holding BCE Inc and Amentum Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Amentum Holdings 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 are associated (or correlated) with Amentum Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Amentum Holdings has no effect on the direction of BCE i.e., BCE and Amentum Holdings go up and down completely randomly.
Pair Corralation between BCE and Amentum Holdings
Considering the 90-day investment horizon BCE Inc is expected to generate 0.24 times more return on investment than Amentum Holdings. However, BCE Inc is 4.1 times less risky than Amentum Holdings. It trades about -0.29 of its potential returns per unit of risk. Amentum Holdings is currently generating about -0.29 per unit of risk. If you would invest 2,785 in BCE Inc on September 12, 2024 and sell it today you would lose (188.00) from holding BCE Inc or give up 6.75% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
BCE Inc vs. Amentum Holdings
Performance |
| Timeline |
| BCE Inc |
| Amentum Holdings |
BCE and Amentum Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BCE and Amentum Holdings
The main advantage of trading using opposite BCE and Amentum Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BCE position performs unexpectedly, Amentum 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 Amentum Holdings will offset losses from the drop in Amentum Holdings' long position.The idea behind BCE Inc and Amentum Holdings pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| Amentum Holdings vs. Flexible Solutions International | Amentum Holdings vs. Olympic Steel | Amentum Holdings vs. Harmony Gold Mining | Amentum Holdings vs. National Beverage 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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
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