Correlation Between BQE Water and Deere
Can any of the company-specific risk be diversified away by investing in both BQE Water and Deere 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 BQE Water and Deere into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between BQE Water and Deere Company, you can compare the effects of market volatilities on BQE Water and Deere 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 BQE Water with a short position of Deere. Check out your portfolio center. Please also check ongoing floating volatility patterns of BQE Water and Deere.
Diversification Opportunities for BQE Water and Deere
Very good diversification
The 3 months correlation between BQE and Deere is -0.47. Overlapping area represents the amount of risk that can be diversified away by holding BQE Water and Deere Company in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Deere Company and BQE Water 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 BQE Water are associated (or correlated) with Deere. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Deere Company has no effect on the direction of BQE Water i.e., BQE Water and Deere go up and down completely randomly.
Pair Corralation between BQE Water and Deere
Assuming the 90 days horizon BQE Water is expected to generate 3.25 times more return on investment than Deere. However, BQE Water is 3.25 times more volatile than Deere Company. It trades about 0.06 of its potential returns per unit of risk. Deere Company is currently generating about 0.09 per unit of risk. If you would invest 2,500 in BQE Water on September 1, 2024 and sell it today you would earn a total of 1,300 from holding BQE Water or generate 52.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 98.95% |
| Values | Daily Returns |
BQE Water vs. Deere Company
Performance |
| Timeline |
| BQE Water |
| Deere Company |
BQE Water and Deere Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BQE Water and Deere
The main advantage of trading using opposite BQE Water and Deere positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BQE Water position performs unexpectedly, Deere 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 Deere will offset losses from the drop in Deere's long position.| BQE Water vs. JPX Global | BQE Water vs. Susglobal Energy Corp | BQE Water vs. Houston Natural Resources | BQE Water vs. Agilyx AS |
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 Anywhere module to track or share privately all of your investments from the convenience of any device.
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