Correlation Between BSP Financial and Pinnacle Investment
Can any of the company-specific risk be diversified away by investing in both BSP Financial and Pinnacle Investment 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 Pinnacle Investment 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 Pinnacle Investment Management, you can compare the effects of market volatilities on BSP Financial and Pinnacle Investment 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 Pinnacle Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of BSP Financial and Pinnacle Investment.
Diversification Opportunities for BSP Financial and Pinnacle Investment
0.59 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between BSP and Pinnacle is 0.59. Overlapping area represents the amount of risk that can be diversified away by holding BSP Financial Group and Pinnacle Investment Management in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pinnacle Investment 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 Pinnacle Investment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pinnacle Investment has no effect on the direction of BSP Financial i.e., BSP Financial and Pinnacle Investment go up and down completely randomly.
Pair Corralation between BSP Financial and Pinnacle Investment
Assuming the 90 days trading horizon BSP Financial Group is expected to generate 1.06 times more return on investment than Pinnacle Investment. However, BSP Financial is 1.06 times more volatile than Pinnacle Investment Management. It trades about 0.21 of its potential returns per unit of risk. Pinnacle Investment Management is currently generating about 0.08 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 Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
BSP Financial Group vs. Pinnacle Investment Management
Performance |
| Timeline |
| BSP Financial Group |
| Pinnacle Investment |
BSP Financial and Pinnacle Investment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BSP Financial and Pinnacle Investment
The main advantage of trading using opposite BSP Financial and Pinnacle Investment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BSP Financial position performs unexpectedly, Pinnacle Investment 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 Pinnacle Investment will offset losses from the drop in Pinnacle Investment's long position.| BSP Financial vs. Qbe Insurance Group | BSP Financial vs. Perpetual Credit Income | BSP Financial vs. Credit Clear | BSP Financial vs. MetalsGrove Mining |
| Pinnacle Investment vs. Falcon Metals | Pinnacle Investment vs. Centuria Industrial Reit | Pinnacle Investment vs. Bell Financial Group | Pinnacle Investment vs. BSP Financial Group |
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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
Other Complementary Tools
| Latest Portfolios Quick portfolio dashboard that showcases your latest portfolios | |
| Stocks Directory Find actively traded stocks across global markets | |
| Alpha Finder Use alpha and beta coefficients to find investment opportunities after accounting for the risk | |
| Portfolio Backtesting Avoid under-diversification and over-optimization by backtesting your portfolios | |
| Portfolio Anywhere Track or share privately all of your investments from the convenience of any device |