Correlation Between BCPG Public and Aqua Public
Can any of the company-specific risk be diversified away by investing in both BCPG Public and Aqua Public 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 Aqua Public into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between BCPG Public and Aqua Public, you can compare the effects of market volatilities on BCPG Public and Aqua Public 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 Aqua Public. Check out your portfolio center. Please also check ongoing floating volatility patterns of BCPG Public and Aqua Public.
Diversification Opportunities for BCPG Public and Aqua Public
0.31 | Correlation Coefficient |
Weak diversification
The 3 months correlation between BCPG and Aqua is 0.31. Overlapping area represents the amount of risk that can be diversified away by holding BCPG Public and Aqua Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aqua Public 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 Aqua Public. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aqua Public has no effect on the direction of BCPG Public i.e., BCPG Public and Aqua Public go up and down completely randomly.
Pair Corralation between BCPG Public and Aqua Public
Assuming the 90 days trading horizon BCPG Public is expected to under-perform the Aqua Public. But the stock apears to be less risky and, when comparing its historical volatility, BCPG Public is 1.55 times less risky than Aqua Public. The stock trades about -0.55 of its potential returns per unit of risk. The Aqua Public is currently generating about -0.11 of returns per unit of risk over similar time horizon. If you would invest 36.00 in Aqua Public on September 1, 2024 and sell it today you would lose (2.00) from holding Aqua Public or give up 5.56% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
BCPG Public vs. Aqua Public
Performance |
| Timeline |
| BCPG Public |
| Aqua Public |
BCPG Public and Aqua Public Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BCPG Public and Aqua Public
The main advantage of trading using opposite BCPG Public and Aqua Public positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BCPG Public position performs unexpectedly, Aqua Public 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 Aqua Public will offset losses from the drop in Aqua Public's long position.The idea behind BCPG Public and Aqua Public 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.| Aqua Public vs. Bangkok Chain Hospital | Aqua Public vs. Grande Asset Hotels | Aqua Public vs. Better World Green | Aqua Public vs. Chularat Hospital Public |
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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
Other Complementary Tools
| Sectors List of equity sectors categorizing publicly traded companies based on their primary business activities | |
| Options Analysis Analyze and evaluate options and option chains as a potential hedge for your portfolios | |
| Alpha Finder Use alpha and beta coefficients to find investment opportunities after accounting for the risk | |
| Idea Breakdown Analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes | |
| Stocks Directory Find actively traded stocks across global markets |