Correlation Between Beyond Meat and BCE
Can any of the company-specific risk be diversified away by investing in both Beyond Meat and BCE 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 Beyond Meat and BCE into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Beyond Meat and BCE Inc, you can compare the effects of market volatilities on Beyond Meat and BCE 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 Beyond Meat with a short position of BCE. Check out your portfolio center. Please also check ongoing floating volatility patterns of Beyond Meat and BCE.
Diversification Opportunities for Beyond Meat and BCE
0.77 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Beyond and BCE is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding Beyond Meat and BCE Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BCE Inc and Beyond Meat 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 Beyond Meat are associated (or correlated) with BCE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BCE Inc has no effect on the direction of Beyond Meat i.e., Beyond Meat and BCE go up and down completely randomly.
Pair Corralation between Beyond Meat and BCE
Given the investment horizon of 90 days Beyond Meat is expected to generate 4.15 times more return on investment than BCE. However, Beyond Meat is 4.15 times more volatile than BCE Inc. It trades about -0.01 of its potential returns per unit of risk. BCE Inc is currently generating about -0.11 per unit of risk. If you would invest 757.00 in Beyond Meat on August 27, 2024 and sell it today you would lose (268.00) from holding Beyond Meat or give up 35.4% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Beyond Meat vs. BCE Inc
Performance |
| Timeline |
| Beyond Meat |
| BCE Inc |
Beyond Meat and BCE Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Beyond Meat and BCE
The main advantage of trading using opposite Beyond Meat and BCE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Beyond Meat position performs unexpectedly, BCE 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 BCE will offset losses from the drop in BCE's long position.| Beyond Meat vs. Bellring Brands LLC | Beyond Meat vs. Ingredion Incorporated | Beyond Meat vs. Nomad Foods | Beyond Meat vs. Post Holdings |
| BCE vs. Liberty Broadband Srs | BCE vs. Ribbon Communications | BCE vs. Liberty Broadband Srs | BCE vs. Shenandoah Telecommunications Co |
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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