Correlation Between BSP Financial and Australian Strategic
Can any of the company-specific risk be diversified away by investing in both BSP Financial and Australian Strategic 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 Australian Strategic 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 Australian Strategic Materials, you can compare the effects of market volatilities on BSP Financial and Australian Strategic 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 Australian Strategic. Check out your portfolio center. Please also check ongoing floating volatility patterns of BSP Financial and Australian Strategic.
Diversification Opportunities for BSP Financial and Australian Strategic
-0.41 | Correlation Coefficient |
Very good diversification
The 3 months correlation between BSP and Australian is -0.41. Overlapping area represents the amount of risk that can be diversified away by holding BSP Financial Group and Australian Strategic Materials in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Australian Strategic 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 Australian Strategic. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Australian Strategic has no effect on the direction of BSP Financial i.e., BSP Financial and Australian Strategic go up and down completely randomly.
Pair Corralation between BSP Financial and Australian Strategic
Assuming the 90 days trading horizon BSP Financial Group is expected to generate 0.71 times more return on investment than Australian Strategic. However, BSP Financial Group is 1.42 times less risky than Australian Strategic. It trades about 0.21 of its potential returns per unit of risk. Australian Strategic Materials is currently generating about -0.02 per unit of risk. If you would invest 649.00 in BSP Financial Group on October 12, 2024 and sell it today you would earn a total of 51.00 from holding BSP Financial Group or generate 7.86% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
BSP Financial Group vs. Australian Strategic Materials
Performance |
| Timeline |
| BSP Financial Group |
| Australian Strategic |
BSP Financial and Australian Strategic Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BSP Financial and Australian Strategic
The main advantage of trading using opposite BSP Financial and Australian Strategic positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BSP Financial position performs unexpectedly, Australian Strategic 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 Australian Strategic will offset losses from the drop in Australian Strategic's long position.| BSP Financial vs. Dexus Convenience Retail | BSP Financial vs. Regal Funds Management | BSP Financial vs. Ainsworth Game Technology | BSP Financial vs. Clime Investment Management |
| Australian Strategic vs. BSP Financial Group | Australian Strategic vs. Ambertech | Australian Strategic vs. Qbe Insurance Group | Australian Strategic vs. Readytech Holdings |
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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
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