Correlation Between Bicicletas Monark and Baidu
Can any of the company-specific risk be diversified away by investing in both Bicicletas Monark and Baidu 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 Bicicletas Monark and Baidu into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Bicicletas Monark SA and Baidu Inc, you can compare the effects of market volatilities on Bicicletas Monark and Baidu 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 Bicicletas Monark with a short position of Baidu. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bicicletas Monark and Baidu.
Diversification Opportunities for Bicicletas Monark and Baidu
-0.51 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Bicicletas and Baidu is -0.51. Overlapping area represents the amount of risk that can be diversified away by holding Bicicletas Monark SA and Baidu Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Baidu Inc and Bicicletas Monark 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 Bicicletas Monark SA are associated (or correlated) with Baidu. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Baidu Inc has no effect on the direction of Bicicletas Monark i.e., Bicicletas Monark and Baidu go up and down completely randomly.
Pair Corralation between Bicicletas Monark and Baidu
Assuming the 90 days trading horizon Bicicletas Monark SA is expected to generate 0.4 times more return on investment than Baidu. However, Bicicletas Monark SA is 2.48 times less risky than Baidu. It trades about 0.02 of its potential returns per unit of risk. Baidu Inc is currently generating about -0.21 per unit of risk. If you would invest 30,900 in Bicicletas Monark SA on August 28, 2024 and sell it today you would earn a total of 100.00 from holding Bicicletas Monark SA or generate 0.32% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bicicletas Monark SA vs. Baidu Inc
Performance |
| Timeline |
| Bicicletas Monark |
| Baidu Inc |
Bicicletas Monark and Baidu Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bicicletas Monark and Baidu
The main advantage of trading using opposite Bicicletas Monark and Baidu positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bicicletas Monark position performs unexpectedly, Baidu 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 Baidu will offset losses from the drop in Baidu's long position.| Bicicletas Monark vs. Baidu Inc | Bicicletas Monark vs. Deutsche Bank Aktiengesellschaft | Bicicletas Monark vs. HSBC Holdings plc | Bicicletas Monark vs. The Bank of |
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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