Correlation Between BF Investment and Heritage Foods
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By analyzing existing cross correlation between BF Investment Limited and Heritage Foods Limited, you can compare the effects of market volatilities on BF Investment and Heritage Foods 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 BF Investment with a short position of Heritage Foods. Check out your portfolio center. Please also check ongoing floating volatility patterns of BF Investment and Heritage Foods.
Diversification Opportunities for BF Investment and Heritage Foods
0.73 | Correlation Coefficient |
Poor diversification
The 3 months correlation between BFINVEST and Heritage is 0.73. Overlapping area represents the amount of risk that can be diversified away by holding BF Investment Limited and Heritage Foods Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Heritage Foods and BF Investment 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 BF Investment Limited are associated (or correlated) with Heritage Foods. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Heritage Foods has no effect on the direction of BF Investment i.e., BF Investment and Heritage Foods go up and down completely randomly.
Pair Corralation between BF Investment and Heritage Foods
Assuming the 90 days trading horizon BF Investment Limited is expected to under-perform the Heritage Foods. In addition to that, BF Investment is 1.0 times more volatile than Heritage Foods Limited. It trades about -0.4 of its total potential returns per unit of risk. Heritage Foods Limited is currently generating about -0.23 per unit of volatility. If you would invest 48,270 in Heritage Foods Limited on October 31, 2024 and sell it today you would lose (7,005) from holding Heritage Foods Limited or give up 14.51% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Significant |
Accuracy | 95.45% |
Values | Daily Returns |
BF Investment Limited vs. Heritage Foods Limited
Performance |
Timeline |
BF Investment Limited |
Heritage Foods |
BF Investment and Heritage Foods Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with BF Investment and Heritage Foods
The main advantage of trading using opposite BF Investment and Heritage Foods positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BF Investment position performs unexpectedly, Heritage Foods 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 Heritage Foods will offset losses from the drop in Heritage Foods' long position.BF Investment vs. Jaypee Infratech Limited | BF Investment vs. LT Technology Services | BF Investment vs. PYRAMID TECHNOPLAST ORD | BF Investment vs. Generic Engineering Construction |
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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 Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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