Correlation Between BSP Financial and Microequities Asset
Can any of the company-specific risk be diversified away by investing in both BSP Financial and Microequities Asset 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 Microequities Asset 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 Microequities Asset Management, you can compare the effects of market volatilities on BSP Financial and Microequities Asset 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 Microequities Asset. Check out your portfolio center. Please also check ongoing floating volatility patterns of BSP Financial and Microequities Asset.
Diversification Opportunities for BSP Financial and Microequities Asset
0.82 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between BSP and Microequities is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding BSP Financial Group and Microequities Asset Management in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Microequities Asset 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 Microequities Asset. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Microequities Asset has no effect on the direction of BSP Financial i.e., BSP Financial and Microequities Asset go up and down completely randomly.
Pair Corralation between BSP Financial and Microequities Asset
Assuming the 90 days trading horizon BSP Financial is expected to generate 1.24 times less return on investment than Microequities Asset. But when comparing it to its historical volatility, BSP Financial Group is 1.55 times less risky than Microequities Asset. It trades about 0.22 of its potential returns per unit of risk. Microequities Asset Management is currently generating about 0.17 of returns per unit of risk over similar time horizon. If you would invest 52.00 in Microequities Asset Management on November 7, 2024 and sell it today you would earn a total of 5.00 from holding Microequities Asset Management or generate 9.62% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 95.24% |
| Values | Daily Returns |
BSP Financial Group vs. Microequities Asset Management
Performance |
| Timeline |
| BSP Financial Group |
| Microequities Asset |
BSP Financial and Microequities Asset Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BSP Financial and Microequities Asset
The main advantage of trading using opposite BSP Financial and Microequities Asset positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BSP Financial position performs unexpectedly, Microequities Asset 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 Microequities Asset will offset losses from the drop in Microequities Asset's long position.| BSP Financial vs. Mach7 Technologies | BSP Financial vs. Ras Technology Holdings | BSP Financial vs. Macquarie Technology Group | BSP Financial vs. Beston Global Food |
| Microequities Asset vs. Hammer Metals | Microequities Asset vs. Centrex Metals | Microequities Asset vs. Lykos Metals | Microequities Asset vs. Beston Global Food |
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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
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