Correlation Between BSP Financial and Nsx
Can any of the company-specific risk be diversified away by investing in both BSP Financial and Nsx 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 Nsx 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 Nsx, you can compare the effects of market volatilities on BSP Financial and Nsx 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 Nsx. Check out your portfolio center. Please also check ongoing floating volatility patterns of BSP Financial and Nsx.
Diversification Opportunities for BSP Financial and Nsx
-0.9 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between BSP and Nsx is -0.9. Overlapping area represents the amount of risk that can be diversified away by holding BSP Financial Group and Nsx in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nsx 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 Nsx. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nsx has no effect on the direction of BSP Financial i.e., BSP Financial and Nsx go up and down completely randomly.
Pair Corralation between BSP Financial and Nsx
Assuming the 90 days trading horizon BSP Financial Group is expected to generate 0.51 times more return on investment than Nsx. However, BSP Financial Group is 1.97 times less risky than Nsx. It trades about 0.23 of its potential returns per unit of risk. Nsx is currently generating about -0.22 per unit of risk. If you would invest 683.00 in BSP Financial Group on November 27, 2024 and sell it today you would earn a total of 54.00 from holding BSP Financial Group or generate 7.91% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
BSP Financial Group vs. Nsx
Performance |
| Timeline |
| BSP Financial Group |
| Nsx |
BSP Financial and Nsx Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BSP Financial and Nsx
The main advantage of trading using opposite BSP Financial and Nsx positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BSP Financial position performs unexpectedly, Nsx 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 Nsx will offset losses from the drop in Nsx's long position.| BSP Financial vs. ARN Media Limited | BSP Financial vs. Kneomedia | BSP Financial vs. Gateway Mining | BSP Financial vs. Talisman Mining |
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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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