Correlation Between BSP Financial and Superior Resources
Can any of the company-specific risk be diversified away by investing in both BSP Financial and Superior Resources 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 Superior Resources 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 Superior Resources, you can compare the effects of market volatilities on BSP Financial and Superior Resources 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 Superior Resources. Check out your portfolio center. Please also check ongoing floating volatility patterns of BSP Financial and Superior Resources.
Diversification Opportunities for BSP Financial and Superior Resources
-0.4 | Correlation Coefficient |
Very good diversification
The 3 months correlation between BSP and Superior is -0.4. Overlapping area represents the amount of risk that can be diversified away by holding BSP Financial Group and Superior Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Superior Resources 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 Superior Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Superior Resources has no effect on the direction of BSP Financial i.e., BSP Financial and Superior Resources go up and down completely randomly.
Pair Corralation between BSP Financial and Superior Resources
Assuming the 90 days trading horizon BSP Financial Group is expected to generate 0.16 times more return on investment than Superior Resources. However, BSP Financial Group is 6.22 times less risky than Superior Resources. It trades about 0.22 of its potential returns per unit of risk. Superior Resources is currently generating about -0.02 per unit of risk. If you would invest 700.00 in BSP Financial Group on November 5, 2024 and sell it today you would earn a total of 53.00 from holding BSP Financial Group or generate 7.57% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
BSP Financial Group vs. Superior Resources
Performance |
| Timeline |
| BSP Financial Group |
| Superior Resources |
BSP Financial and Superior Resources Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BSP Financial and Superior Resources
The main advantage of trading using opposite BSP Financial and Superior Resources positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BSP Financial position performs unexpectedly, Superior Resources 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 Superior Resources will offset losses from the drop in Superior Resources' long position.| BSP Financial vs. COAST ENTERTAINMENT HOLDINGS | BSP Financial vs. Viva Leisure | BSP Financial vs. Nine Entertainment Co | BSP Financial vs. Dug Technology |
| Superior Resources vs. Hotel Property Investments | Superior Resources vs. Flagship Investments | Superior Resources vs. Diversified United Investment | Superior Resources vs. Alternative Investment Trust |
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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
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