Correlation Between Popular Capital and BFC Capital
Can any of the company-specific risk be diversified away by investing in both Popular Capital and BFC Capital 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 Popular Capital and BFC Capital into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Popular Capital Trust and BFC Capital Trust, you can compare the effects of market volatilities on Popular Capital and BFC Capital 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 Popular Capital with a short position of BFC Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of Popular Capital and BFC Capital.
Diversification Opportunities for Popular Capital and BFC Capital
0.39 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Popular and BFC is 0.39. Overlapping area represents the amount of risk that can be diversified away by holding Popular Capital Trust and BFC Capital Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BFC Capital Trust and Popular Capital 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 Popular Capital Trust are associated (or correlated) with BFC Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BFC Capital Trust has no effect on the direction of Popular Capital i.e., Popular Capital and BFC Capital go up and down completely randomly.
Pair Corralation between Popular Capital and BFC Capital
Assuming the 90 days horizon Popular Capital Trust is expected to generate 1.35 times more return on investment than BFC Capital. However, Popular Capital is 1.35 times more volatile than BFC Capital Trust. It trades about 0.03 of its potential returns per unit of risk. BFC Capital Trust is currently generating about -0.08 per unit of risk. If you would invest 2,544 in Popular Capital Trust on August 25, 2024 and sell it today you would earn a total of 12.00 from holding Popular Capital Trust or generate 0.47% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
Popular Capital Trust vs. BFC Capital Trust
Performance |
| Timeline |
| Popular Capital Trust |
| BFC Capital Trust |
Popular Capital and BFC Capital Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Popular Capital and BFC Capital
The main advantage of trading using opposite Popular Capital and BFC Capital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Popular Capital position performs unexpectedly, BFC Capital 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 BFC Capital will offset losses from the drop in BFC Capital's long position.| Popular Capital vs. BFC Capital Trust | Popular Capital vs. Popular | Popular Capital vs. Oxford Lane Capital | Popular Capital vs. Wintrust Financial Corp |
| BFC Capital vs. Popular Capital Trust | BFC Capital vs. CHS Inc CN | BFC Capital vs. Wintrust Financial Corp | BFC Capital vs. Auburn National Bancorporation |
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 Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
Other Complementary Tools
| Competition Analyzer Analyze and compare many basic indicators for a group of related or unrelated entities | |
| Portfolio Backtesting Avoid under-diversification and over-optimization by backtesting your portfolios | |
| Options Analysis Analyze and evaluate options and option chains as a potential hedge for your portfolios | |
| Idea Analyzer Analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas | |
| AI Portfolio Architect Use AI to generate optimal portfolios and find profitable investment opportunities |