Correlation Between BF Investment and Summit Securities
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By analyzing existing cross correlation between BF Investment Limited and Summit Securities Limited, you can compare the effects of market volatilities on BF Investment and Summit Securities 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 Summit Securities. Check out your portfolio center. Please also check ongoing floating volatility patterns of BF Investment and Summit Securities.
Diversification Opportunities for BF Investment and Summit Securities
0.89 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between BFINVEST and Summit is 0.89. Overlapping area represents the amount of risk that can be diversified away by holding BF Investment Limited and Summit Securities Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Summit Securities 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 Summit Securities. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Summit Securities has no effect on the direction of BF Investment i.e., BF Investment and Summit Securities go up and down completely randomly.
Pair Corralation between BF Investment and Summit Securities
Assuming the 90 days trading horizon BF Investment Limited is expected to under-perform the Summit Securities. But the stock apears to be less risky and, when comparing its historical volatility, BF Investment Limited is 2.34 times less risky than Summit Securities. The stock trades about -0.07 of its potential returns per unit of risk. The Summit Securities Limited is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 335,770 in Summit Securities Limited on September 12, 2024 and sell it today you would earn a total of 6,905 from holding Summit Securities Limited or generate 2.06% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
BF Investment Limited vs. Summit Securities Limited
Performance |
| Timeline |
| BF Investment Limited |
| Summit Securities |
BF Investment and Summit Securities Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BF Investment and Summit Securities
The main advantage of trading using opposite BF Investment and Summit Securities positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BF Investment position performs unexpectedly, Summit Securities 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 Summit Securities will offset losses from the drop in Summit Securities' long position.| BF Investment vs. Yes Bank Limited | BF Investment vs. Indian Oil | BF Investment vs. Indo Borax Chemicals | BF Investment vs. Kingfa Science Technology |
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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
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