Correlation Between Better World and Beauty Community
Can any of the company-specific risk be diversified away by investing in both Better World and Beauty Community 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 Better World and Beauty Community into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Better World Green and Beauty Community Public, you can compare the effects of market volatilities on Better World and Beauty Community 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 Better World with a short position of Beauty Community. Check out your portfolio center. Please also check ongoing floating volatility patterns of Better World and Beauty Community.
Diversification Opportunities for Better World and Beauty Community
0.5 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Better and Beauty is 0.5. Overlapping area represents the amount of risk that can be diversified away by holding Better World Green and Beauty Community Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Beauty Community Public and Better World 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 Better World Green are associated (or correlated) with Beauty Community. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Beauty Community Public has no effect on the direction of Better World i.e., Better World and Beauty Community go up and down completely randomly.
Pair Corralation between Better World and Beauty Community
Assuming the 90 days trading horizon Better World Green is expected to under-perform the Beauty Community. But the stock apears to be less risky and, when comparing its historical volatility, Better World Green is 13.3 times less risky than Beauty Community. The stock trades about -0.02 of its potential returns per unit of risk. The Beauty Community Public is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 151.00 in Beauty Community Public on August 26, 2024 and sell it today you would lose (112.00) from holding Beauty Community Public or give up 74.17% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Better World Green vs. Beauty Community Public
Performance |
| Timeline |
| Better World Green |
| Beauty Community Public |
Better World and Beauty Community Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Better World and Beauty Community
The main advantage of trading using opposite Better World and Beauty Community positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Better World position performs unexpectedly, Beauty Community 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 Beauty Community will offset losses from the drop in Beauty Community's long position.| Better World vs. Beauty Community Public | Better World vs. Demco Public | Better World vs. Asia Aviation Public | Better World vs. CK Power Public |
| Beauty Community vs. SCB X Public | Beauty Community vs. Kasikornbank Public | Beauty Community vs. PTT Public | Beauty Community vs. Kasikornbank Public |
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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.
Other Complementary Tools
| Odds Of Bankruptcy Get analysis of equity chance of financial distress in the next 2 years | |
| My Watchlist Analysis Analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like | |
| Commodity Channel Use Commodity Channel Index to analyze current equity momentum | |
| Pattern Recognition Use different Pattern Recognition models to time the market across multiple global exchanges | |
| Positions Ratings Determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance |