Correlation Between BSP Financial and Perpetual Credit
Can any of the company-specific risk be diversified away by investing in both BSP Financial and Perpetual Credit 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 Perpetual Credit 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 Perpetual Credit Income, you can compare the effects of market volatilities on BSP Financial and Perpetual Credit 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 Perpetual Credit. Check out your portfolio center. Please also check ongoing floating volatility patterns of BSP Financial and Perpetual Credit.
Diversification Opportunities for BSP Financial and Perpetual Credit
0.47 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between BSP and Perpetual is 0.47. Overlapping area represents the amount of risk that can be diversified away by holding BSP Financial Group and Perpetual Credit Income in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Perpetual Credit Income 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 Perpetual Credit. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Perpetual Credit Income has no effect on the direction of BSP Financial i.e., BSP Financial and Perpetual Credit go up and down completely randomly.
Pair Corralation between BSP Financial and Perpetual Credit
Assuming the 90 days trading horizon BSP Financial Group is expected to generate 1.5 times more return on investment than Perpetual Credit. However, BSP Financial is 1.5 times more volatile than Perpetual Credit Income. It trades about 0.13 of its potential returns per unit of risk. Perpetual Credit Income is currently generating about 0.01 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 Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
BSP Financial Group vs. Perpetual Credit Income
Performance |
| Timeline |
| BSP Financial Group |
| Perpetual Credit Income |
BSP Financial and Perpetual Credit Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BSP Financial and Perpetual Credit
The main advantage of trading using opposite BSP Financial and Perpetual Credit positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BSP Financial position performs unexpectedly, Perpetual Credit 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 Perpetual Credit will offset losses from the drop in Perpetual Credit's long position.| BSP Financial vs. Stelar Metals | BSP Financial vs. Truscott Mining Corp | BSP Financial vs. Iron Road | BSP Financial vs. Falcon Metals |
| Perpetual Credit vs. Embark Education Group | Perpetual Credit vs. Carnegie Clean Energy | Perpetual Credit vs. Autosports Group | Perpetual Credit vs. Energy Technologies Limited |
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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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