Correlation Between Bonus Biogroup and Brill Shoe
Can any of the company-specific risk be diversified away by investing in both Bonus Biogroup and Brill Shoe 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 Bonus Biogroup and Brill Shoe into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Bonus Biogroup and Brill Shoe Industries, you can compare the effects of market volatilities on Bonus Biogroup and Brill Shoe 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 Bonus Biogroup with a short position of Brill Shoe. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bonus Biogroup and Brill Shoe.
Diversification Opportunities for Bonus Biogroup and Brill Shoe
0.61 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Bonus and Brill is 0.61. Overlapping area represents the amount of risk that can be diversified away by holding Bonus Biogroup and Brill Shoe Industries in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Brill Shoe Industries and Bonus Biogroup 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 Bonus Biogroup are associated (or correlated) with Brill Shoe. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Brill Shoe Industries has no effect on the direction of Bonus Biogroup i.e., Bonus Biogroup and Brill Shoe go up and down completely randomly.
Pair Corralation between Bonus Biogroup and Brill Shoe
Assuming the 90 days trading horizon Bonus Biogroup is expected to generate 2.73 times more return on investment than Brill Shoe. However, Bonus Biogroup is 2.73 times more volatile than Brill Shoe Industries. It trades about 0.22 of its potential returns per unit of risk. Brill Shoe Industries is currently generating about 0.07 per unit of risk. If you would invest 1,090 in Bonus Biogroup on November 28, 2024 and sell it today you would earn a total of 750.00 from holding Bonus Biogroup or generate 68.81% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bonus Biogroup vs. Brill Shoe Industries
Performance |
| Timeline |
| Bonus Biogroup |
| Brill Shoe Industries |
Bonus Biogroup and Brill Shoe Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bonus Biogroup and Brill Shoe
The main advantage of trading using opposite Bonus Biogroup and Brill Shoe positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bonus Biogroup position performs unexpectedly, Brill Shoe 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 Brill Shoe will offset losses from the drop in Brill Shoe's long position.| Bonus Biogroup vs. Netz Hotels | Bonus Biogroup vs. Tower Semiconductor | Bonus Biogroup vs. Rapac Communication Infrastructure | Bonus Biogroup vs. B Communications |
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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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