Correlation Between BSP Financial and Aussie Broadband
Can any of the company-specific risk be diversified away by investing in both BSP Financial and Aussie Broadband 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 BSP Financial and Aussie Broadband into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between BSP Financial Group and Aussie Broadband, you can compare the effects of market volatilities on BSP Financial and Aussie Broadband 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 BSP Financial with a short position of Aussie Broadband. Check out your portfolio center. Please also check ongoing floating volatility patterns of BSP Financial and Aussie Broadband.
Diversification Opportunities for BSP Financial and Aussie Broadband
-0.05 | Correlation Coefficient |
Good diversification
The 3 months correlation between BSP and Aussie is -0.05. Overlapping area represents the amount of risk that can be diversified away by holding BSP Financial Group and Aussie Broadband in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aussie Broadband and BSP Financial 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 BSP Financial Group are associated (or correlated) with Aussie Broadband. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aussie Broadband has no effect on the direction of BSP Financial i.e., BSP Financial and Aussie Broadband go up and down completely randomly.
Pair Corralation between BSP Financial and Aussie Broadband
Assuming the 90 days trading horizon BSP Financial Group is expected to generate 1.01 times more return on investment than Aussie Broadband. However, BSP Financial is 1.01 times more volatile than Aussie Broadband. It trades about 0.13 of its potential returns per unit of risk. Aussie Broadband is currently generating about -0.08 per unit of risk. If you would invest 620.00 in BSP Financial Group on September 13, 2024 and sell it today you would earn a total of 29.00 from holding BSP Financial Group or generate 4.68% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
BSP Financial Group vs. Aussie Broadband
Performance |
| Timeline |
| BSP Financial Group |
| Aussie Broadband |
BSP Financial and Aussie Broadband Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BSP Financial and Aussie Broadband
The main advantage of trading using opposite BSP Financial and Aussie Broadband positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BSP Financial position performs unexpectedly, Aussie Broadband 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 Aussie Broadband will offset losses from the drop in Aussie Broadband's long position.| BSP Financial vs. Stelar Metals | BSP Financial vs. Truscott Mining Corp | BSP Financial vs. Iron Road | BSP Financial vs. Falcon Metals |
| Aussie Broadband vs. Homeco Daily Needs | Aussie Broadband vs. Viva Leisure | Aussie Broadband vs. Regal Funds Management | Aussie Broadband vs. Cleanaway Waste Management |
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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
Other Complementary Tools
| Bollinger Bands Use Bollinger Bands indicator to analyze target price for a given investing horizon | |
| Theme Ratings Determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Global Markets Map Get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes | |
| Instant Ratings Determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Price Exposure Probability Analyze equity upside and downside potential for a given time horizon across multiple markets |