Correlation Between BF Utilities and Selan Exploration
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By analyzing existing cross correlation between BF Utilities Limited and Selan Exploration Technology, you can compare the effects of market volatilities on BF Utilities and Selan Exploration 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 BF Utilities with a short position of Selan Exploration. Check out your portfolio center. Please also check ongoing floating volatility patterns of BF Utilities and Selan Exploration.
Diversification Opportunities for BF Utilities and Selan Exploration
0.6 | Correlation Coefficient |
Poor diversification
The 3 months correlation between BFUTILITIE and Selan is 0.6. Overlapping area represents the amount of risk that can be diversified away by holding BF Utilities Limited and Selan Exploration Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Selan Exploration and BF Utilities 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 BF Utilities Limited are associated (or correlated) with Selan Exploration. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Selan Exploration has no effect on the direction of BF Utilities i.e., BF Utilities and Selan Exploration go up and down completely randomly.
Pair Corralation between BF Utilities and Selan Exploration
Assuming the 90 days trading horizon BF Utilities Limited is expected to under-perform the Selan Exploration. But the stock apears to be less risky and, when comparing its historical volatility, BF Utilities Limited is 1.34 times less risky than Selan Exploration. The stock trades about -0.25 of its potential returns per unit of risk. The Selan Exploration Technology is currently generating about -0.15 of returns per unit of risk over similar time horizon. If you would invest 80,690 in Selan Exploration Technology on November 7, 2024 and sell it today you would lose (11,975) from holding Selan Exploration Technology or give up 14.84% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
BF Utilities Limited vs. Selan Exploration Technology
Performance |
| Timeline |
| BF Utilities Limited |
| Selan Exploration |
BF Utilities and Selan Exploration Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BF Utilities and Selan Exploration
The main advantage of trading using opposite BF Utilities and Selan Exploration positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BF Utilities position performs unexpectedly, Selan Exploration 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 Selan Exploration will offset losses from the drop in Selan Exploration's long position.| BF Utilities vs. Rashtriya Chemicals and | BF Utilities vs. JGCHEMICALS LIMITED | BF Utilities vs. IOL Chemicals and | BF Utilities vs. Khaitan Chemicals Fertilizers |
| Selan Exploration vs. Digjam Limited | Selan Exploration vs. Kingfa Science Technology | Selan Exploration vs. Rico Auto Industries | Selan Exploration vs. GACM 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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
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