Correlation Between BCPG Public and Absolute Clean
Can any of the company-specific risk be diversified away by investing in both BCPG Public and Absolute Clean 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 BCPG Public and Absolute Clean into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between BCPG Public and Absolute Clean Energy, you can compare the effects of market volatilities on BCPG Public and Absolute Clean 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 BCPG Public with a short position of Absolute Clean. Check out your portfolio center. Please also check ongoing floating volatility patterns of BCPG Public and Absolute Clean.
Diversification Opportunities for BCPG Public and Absolute Clean
0.19 | Correlation Coefficient |
Average diversification
The 3 months correlation between BCPG and Absolute is 0.19. Overlapping area represents the amount of risk that can be diversified away by holding BCPG Public and Absolute Clean Energy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Absolute Clean Energy and BCPG Public 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 BCPG Public are associated (or correlated) with Absolute Clean. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Absolute Clean Energy has no effect on the direction of BCPG Public i.e., BCPG Public and Absolute Clean go up and down completely randomly.
Pair Corralation between BCPG Public and Absolute Clean
Assuming the 90 days trading horizon BCPG Public is expected to under-perform the Absolute Clean. But the stock apears to be less risky and, when comparing its historical volatility, BCPG Public is 25.32 times less risky than Absolute Clean. The stock trades about -0.05 of its potential returns per unit of risk. The Absolute Clean Energy is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 266.00 in Absolute Clean Energy on August 30, 2024 and sell it today you would lose (136.00) from holding Absolute Clean Energy or give up 51.13% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 99.79% |
| Values | Daily Returns |
BCPG Public vs. Absolute Clean Energy
Performance |
| Timeline |
| BCPG Public |
| Absolute Clean Energy |
BCPG Public and Absolute Clean Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BCPG Public and Absolute Clean
The main advantage of trading using opposite BCPG Public and Absolute Clean positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BCPG Public position performs unexpectedly, Absolute Clean 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 Absolute Clean will offset losses from the drop in Absolute Clean's long position.| BCPG Public vs. WHA Public | BCPG Public vs. Global Power Synergy | BCPG Public vs. TPI Polene Power | BCPG Public vs. Bangkok Expressway and |
| Absolute Clean vs. BCPG Public | Absolute Clean vs. Energy Absolute Public | Absolute Clean vs. Gunkul Engineering Public | Absolute Clean vs. Gulf Energy Development |
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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
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