Correlation Between BJC Heavy and Christiani Nielsen
Can any of the company-specific risk be diversified away by investing in both BJC Heavy and Christiani Nielsen 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 BJC Heavy and Christiani Nielsen into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between BJC Heavy Industries and Christiani Nielsen Public, you can compare the effects of market volatilities on BJC Heavy and Christiani Nielsen 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 BJC Heavy with a short position of Christiani Nielsen. Check out your portfolio center. Please also check ongoing floating volatility patterns of BJC Heavy and Christiani Nielsen.
Diversification Opportunities for BJC Heavy and Christiani Nielsen
0.91 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between BJC and Christiani is 0.91. Overlapping area represents the amount of risk that can be diversified away by holding BJC Heavy Industries and Christiani Nielsen Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Christiani Nielsen Public and BJC Heavy 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 BJC Heavy Industries are associated (or correlated) with Christiani Nielsen. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Christiani Nielsen Public has no effect on the direction of BJC Heavy i.e., BJC Heavy and Christiani Nielsen go up and down completely randomly.
Pair Corralation between BJC Heavy and Christiani Nielsen
Assuming the 90 days trading horizon BJC Heavy Industries is expected to generate 0.83 times more return on investment than Christiani Nielsen. However, BJC Heavy Industries is 1.2 times less risky than Christiani Nielsen. It trades about -0.25 of its potential returns per unit of risk. Christiani Nielsen Public is currently generating about -0.37 per unit of risk. If you would invest 131.00 in BJC Heavy Industries on August 30, 2024 and sell it today you would lose (11.00) from holding BJC Heavy Industries or give up 8.4% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
BJC Heavy Industries vs. Christiani Nielsen Public
Performance |
| Timeline |
| BJC Heavy Industries |
| Christiani Nielsen Public |
BJC Heavy and Christiani Nielsen Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BJC Heavy and Christiani Nielsen
The main advantage of trading using opposite BJC Heavy and Christiani Nielsen positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BJC Heavy position performs unexpectedly, Christiani Nielsen 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 Christiani Nielsen will offset losses from the drop in Christiani Nielsen's long position.| BJC Heavy vs. CH Karnchang Public | BJC Heavy vs. Asia Aviation Public | BJC Heavy vs. AAPICO Hitech Public | BJC Heavy vs. GFPT Public |
| Christiani Nielsen vs. CH Karnchang Public | Christiani Nielsen vs. Italian Thai Development Public | Christiani Nielsen vs. EMC Public | Christiani Nielsen vs. AAPICO Hitech Public |
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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
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