Correlation Between BSP Financial and Sports Entertainment
Can any of the company-specific risk be diversified away by investing in both BSP Financial and Sports Entertainment 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 Sports Entertainment 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 Sports Entertainment Group, you can compare the effects of market volatilities on BSP Financial and Sports Entertainment 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 Sports Entertainment. Check out your portfolio center. Please also check ongoing floating volatility patterns of BSP Financial and Sports Entertainment.
Diversification Opportunities for BSP Financial and Sports Entertainment
-0.61 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between BSP and Sports is -0.61. Overlapping area represents the amount of risk that can be diversified away by holding BSP Financial Group and Sports Entertainment Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sports Entertainment 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 Sports Entertainment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sports Entertainment has no effect on the direction of BSP Financial i.e., BSP Financial and Sports Entertainment go up and down completely randomly.
Pair Corralation between BSP Financial and Sports Entertainment
Assuming the 90 days trading horizon BSP Financial Group is expected to generate 0.43 times more return on investment than Sports Entertainment. However, BSP Financial Group is 2.33 times less risky than Sports Entertainment. It trades about 0.2 of its potential returns per unit of risk. Sports Entertainment Group is currently generating about -0.08 per unit of risk. If you would invest 623.00 in BSP Financial Group on October 19, 2024 and sell it today you would earn a total of 97.00 from holding BSP Financial Group or generate 15.57% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
BSP Financial Group vs. Sports Entertainment Group
Performance |
| Timeline |
| BSP Financial Group |
| Sports Entertainment |
BSP Financial and Sports Entertainment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BSP Financial and Sports Entertainment
The main advantage of trading using opposite BSP Financial and Sports Entertainment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BSP Financial position performs unexpectedly, Sports Entertainment 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 Sports Entertainment will offset losses from the drop in Sports Entertainment's long position.| BSP Financial vs. Queste Communications | BSP Financial vs. Pure Foods Tasmania | BSP Financial vs. 29Metals | BSP Financial vs. Centaurus Metals |
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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 Commodity Directory module to find actively traded commodities issued by global exchanges.
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