Correlation Between Bloomsbury Publishing and Beeks Trading
Can any of the company-specific risk be diversified away by investing in both Bloomsbury Publishing and Beeks Trading 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 Bloomsbury Publishing and Beeks Trading into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Bloomsbury Publishing Plc and Beeks Trading, you can compare the effects of market volatilities on Bloomsbury Publishing and Beeks Trading 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 Bloomsbury Publishing with a short position of Beeks Trading. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bloomsbury Publishing and Beeks Trading.
Diversification Opportunities for Bloomsbury Publishing and Beeks Trading
0.26 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Bloomsbury and Beeks is 0.26. Overlapping area represents the amount of risk that can be diversified away by holding Bloomsbury Publishing Plc and Beeks Trading in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Beeks Trading and Bloomsbury Publishing 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 Bloomsbury Publishing Plc are associated (or correlated) with Beeks Trading. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Beeks Trading has no effect on the direction of Bloomsbury Publishing i.e., Bloomsbury Publishing and Beeks Trading go up and down completely randomly.
Pair Corralation between Bloomsbury Publishing and Beeks Trading
Assuming the 90 days trading horizon Bloomsbury Publishing Plc is expected to under-perform the Beeks Trading. But the stock apears to be less risky and, when comparing its historical volatility, Bloomsbury Publishing Plc is 3.19 times less risky than Beeks Trading. The stock trades about -0.03 of its potential returns per unit of risk. The Beeks Trading is currently generating about 0.18 of returns per unit of risk over similar time horizon. If you would invest 25,200 in Beeks Trading on November 28, 2024 and sell it today you would earn a total of 3,200 from holding Beeks Trading or generate 12.7% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bloomsbury Publishing Plc vs. Beeks Trading
Performance |
| Timeline |
| Bloomsbury Publishing Plc |
| Beeks Trading |
Bloomsbury Publishing and Beeks Trading Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bloomsbury Publishing and Beeks Trading
The main advantage of trading using opposite Bloomsbury Publishing and Beeks Trading positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bloomsbury Publishing position performs unexpectedly, Beeks Trading 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 Beeks Trading will offset losses from the drop in Beeks Trading's long position.| Bloomsbury Publishing vs. Beeks Trading | Bloomsbury Publishing vs. Chrysalis Investments | Bloomsbury Publishing vs. Host Hotels Resorts | Bloomsbury Publishing vs. Capital Drilling |
| Beeks Trading vs. Bellevue Healthcare Trust | Beeks Trading vs. PureTech Health plc | Beeks Trading vs. Gaztransport et Technigaz | Beeks Trading vs. Abingdon Health Plc |
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 Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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