Correlation Between BCE and Asia Global
Can any of the company-specific risk be diversified away by investing in both BCE and Asia Global 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 Asia Global into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between BCE Inc and Asia Global Crossing, you can compare the effects of market volatilities on BCE and Asia Global 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 Asia Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of BCE and Asia Global.
Diversification Opportunities for BCE and Asia Global
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between BCE and Asia is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding BCE Inc and Asia Global Crossing in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Asia Global Crossing 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 Asia Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Asia Global Crossing has no effect on the direction of BCE i.e., BCE and Asia Global go up and down completely randomly.
Pair Corralation between BCE and Asia Global
If you would invest 1,069 in BCE Inc on August 28, 2024 and sell it today you would earn a total of 31.00 from holding BCE Inc or generate 2.9% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 1.56% |
| Values | Daily Returns |
BCE Inc vs. Asia Global Crossing
Performance |
| Timeline |
| BCE Inc |
| Asia Global Crossing |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
BCE and Asia Global Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BCE and Asia Global
The main advantage of trading using opposite BCE and Asia Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BCE position performs unexpectedly, Asia Global 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 Asia Global will offset losses from the drop in Asia Global's long position.The idea behind BCE Inc and Asia Global Crossing 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.| Asia Global vs. BCE Inc | Asia Global vs. Advanced Info Service | Asia Global vs. American Nortel Communications | Asia Global vs. Axiologix |
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 Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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