Correlation Between BEC World and VGI Public
Can any of the company-specific risk be diversified away by investing in both BEC World and VGI 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 BEC World and VGI Public into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between BEC World Public and VGI Public, you can compare the effects of market volatilities on BEC World and VGI 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 BEC World with a short position of VGI Public. Check out your portfolio center. Please also check ongoing floating volatility patterns of BEC World and VGI Public.
Diversification Opportunities for BEC World and VGI Public
0.92 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between BEC and VGI is 0.92. Overlapping area represents the amount of risk that can be diversified away by holding BEC World Public and VGI Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on VGI Public and BEC World 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 BEC World Public are associated (or correlated) with VGI Public. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of VGI Public has no effect on the direction of BEC World i.e., BEC World and VGI Public go up and down completely randomly.
Pair Corralation between BEC World and VGI Public
Assuming the 90 days trading horizon BEC World is expected to generate 1.07 times less return on investment than VGI Public. But when comparing it to its historical volatility, BEC World Public is 1.0 times less risky than VGI Public. It trades about 0.05 of its potential returns per unit of risk. VGI Public is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 300.00 in VGI Public on August 28, 2024 and sell it today you would lose (40.00) from holding VGI Public or give up 13.33% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
BEC World Public vs. VGI Public
Performance |
| Timeline |
| BEC World Public |
| VGI Public |
BEC World and VGI Public Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BEC World and VGI Public
The main advantage of trading using opposite BEC World and VGI Public positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BEC World position performs unexpectedly, VGI 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 VGI Public will offset losses from the drop in VGI Public's long position.| BEC World vs. Indara Insurance Public | BEC World vs. Regional Container Lines | BEC World vs. Regional Container Lines | BEC World vs. Mahachai Hospital Public |
| VGI Public vs. Indara Insurance Public | VGI Public vs. Regional Container Lines | VGI Public vs. Regional Container Lines | VGI Public vs. Mahachai 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 Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
Other Complementary Tools
| Headlines Timeline Stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity | |
| Price Exposure Probability Analyze equity upside and downside potential for a given time horizon across multiple markets | |
| Stock Screener Find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook. | |
| Funds Screener Find actively-traded funds from around the world traded on over 30 global exchanges | |
| Equity Forecasting Use basic forecasting models to generate price predictions and determine price momentum |