Correlation Between Bank Of and Warehouses
Can any of the company-specific risk be diversified away by investing in both Bank Of and Warehouses 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 Bank Of and Warehouses into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between The Bank of and Warehouses De Pauw, you can compare the effects of market volatilities on Bank Of and Warehouses 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 Bank Of with a short position of Warehouses. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bank Of and Warehouses.
Diversification Opportunities for Bank Of and Warehouses
-0.94 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Bank and Warehouses is -0.94. Overlapping area represents the amount of risk that can be diversified away by holding The Bank of and Warehouses De Pauw in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Warehouses De Pauw and Bank Of 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 The Bank of are associated (or correlated) with Warehouses. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Warehouses De Pauw has no effect on the direction of Bank Of i.e., Bank Of and Warehouses go up and down completely randomly.
Pair Corralation between Bank Of and Warehouses
Assuming the 90 days horizon The Bank of is expected to generate 0.96 times more return on investment than Warehouses. However, The Bank of is 1.04 times less risky than Warehouses. It trades about 0.1 of its potential returns per unit of risk. Warehouses De Pauw is currently generating about -0.02 per unit of risk. If you would invest 3,899 in The Bank of on September 13, 2024 and sell it today you would earn a total of 3,725 from holding The Bank of or generate 95.54% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
The Bank of vs. Warehouses De Pauw
Performance |
| Timeline |
| The Bank |
| Warehouses De Pauw |
Bank Of and Warehouses Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bank Of and Warehouses
The main advantage of trading using opposite Bank Of and Warehouses positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bank Of position performs unexpectedly, Warehouses 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 Warehouses will offset losses from the drop in Warehouses' long position.| Bank Of vs. Hanison Construction Holdings | Bank Of vs. LANDSEA GREEN MANAGEMENT | Bank Of vs. Chongqing Machinery Electric | Bank Of vs. ALEFARM BREWING DK 05 |
| Warehouses vs. INTERSHOP Communications Aktiengesellschaft | Warehouses vs. Gaztransport Technigaz SA | Warehouses vs. Consolidated Communications Holdings | Warehouses vs. Air Transport Services |
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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
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