Correlation Between BSP Financial and Champion Iron
Can any of the company-specific risk be diversified away by investing in both BSP Financial and Champion Iron 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 Champion Iron 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 Champion Iron, you can compare the effects of market volatilities on BSP Financial and Champion Iron 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 Champion Iron. Check out your portfolio center. Please also check ongoing floating volatility patterns of BSP Financial and Champion Iron.
Diversification Opportunities for BSP Financial and Champion Iron
0.28 | Correlation Coefficient |
Modest diversification
The 3 months correlation between BSP and Champion is 0.28. Overlapping area represents the amount of risk that can be diversified away by holding BSP Financial Group and Champion Iron in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Champion Iron 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 Champion Iron. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Champion Iron has no effect on the direction of BSP Financial i.e., BSP Financial and Champion Iron go up and down completely randomly.
Pair Corralation between BSP Financial and Champion Iron
Assuming the 90 days trading horizon BSP Financial Group is expected to generate 0.71 times more return on investment than Champion Iron. However, BSP Financial Group is 1.42 times less risky than Champion Iron. It trades about 0.09 of its potential returns per unit of risk. Champion Iron is currently generating about -0.08 per unit of risk. If you would invest 630.00 in BSP Financial Group on August 29, 2024 and sell it today you would earn a total of 20.00 from holding BSP Financial Group or generate 3.17% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
BSP Financial Group vs. Champion Iron
Performance |
| Timeline |
| BSP Financial Group |
| Champion Iron |
BSP Financial and Champion Iron Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BSP Financial and Champion Iron
The main advantage of trading using opposite BSP Financial and Champion Iron positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BSP Financial position performs unexpectedly, Champion Iron 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 Champion Iron will offset losses from the drop in Champion Iron's long position.| BSP Financial vs. Champion Iron | BSP Financial vs. Ridley | BSP Financial vs. Peel Mining | BSP Financial vs. Australian Dairy Farms |
| Champion Iron vs. Future Generation Global | Champion Iron vs. Rubicon Water | Champion Iron vs. Kinatico | Champion Iron vs. Jade Gas 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..
Other Complementary Tools
| Insider Screener Find insiders across different sectors to evaluate their impact on performance | |
| Earnings Calls Check upcoming earnings announcements updated hourly across public exchanges | |
| Risk-Return Analysis View associations between returns expected from investment and the risk you assume | |
| Financial Widgets Easily integrated Macroaxis content with over 30 different plug-and-play financial widgets | |
| Premium Stories Follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope |