Correlation Between BANK CENTRAL and VERTIV HOLCL
Can any of the company-specific risk be diversified away by investing in both BANK CENTRAL and VERTIV HOLCL 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 BANK CENTRAL and VERTIV HOLCL into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between BANK CENTRAL ASIA and VERTIV HOLCL A, you can compare the effects of market volatilities on BANK CENTRAL and VERTIV HOLCL 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 BANK CENTRAL with a short position of VERTIV HOLCL. Check out your portfolio center. Please also check ongoing floating volatility patterns of BANK CENTRAL and VERTIV HOLCL.
Diversification Opportunities for BANK CENTRAL and VERTIV HOLCL
-0.55 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between BANK and VERTIV is -0.55. Overlapping area represents the amount of risk that can be diversified away by holding BANK CENTRAL ASIA and VERTIV HOLCL A in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on VERTIV HOLCL A and BANK CENTRAL 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 BANK CENTRAL ASIA are associated (or correlated) with VERTIV HOLCL. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of VERTIV HOLCL A has no effect on the direction of BANK CENTRAL i.e., BANK CENTRAL and VERTIV HOLCL go up and down completely randomly.
Pair Corralation between BANK CENTRAL and VERTIV HOLCL
Assuming the 90 days trading horizon BANK CENTRAL ASIA is expected to generate 0.1 times more return on investment than VERTIV HOLCL. However, BANK CENTRAL ASIA is 10.14 times less risky than VERTIV HOLCL. It trades about -0.21 of its potential returns per unit of risk. VERTIV HOLCL A is currently generating about -0.08 per unit of risk. If you would invest 59.00 in BANK CENTRAL ASIA on November 7, 2024 and sell it today you would lose (2.00) from holding BANK CENTRAL ASIA or give up 3.39% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
BANK CENTRAL ASIA vs. VERTIV HOLCL A
Performance |
| Timeline |
| BANK CENTRAL ASIA |
| VERTIV HOLCL A |
BANK CENTRAL and VERTIV HOLCL Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BANK CENTRAL and VERTIV HOLCL
The main advantage of trading using opposite BANK CENTRAL and VERTIV HOLCL positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BANK CENTRAL position performs unexpectedly, VERTIV HOLCL 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 VERTIV HOLCL will offset losses from the drop in VERTIV HOLCL's long position.| BANK CENTRAL vs. Townsquare Media | BANK CENTRAL vs. PARKEN Sport Entertainment | BANK CENTRAL vs. GigaMedia | BANK CENTRAL vs. Fidelity National Information |
| VERTIV HOLCL vs. DISTRICT METALS | VERTIV HOLCL vs. Jacquet Metal Service | VERTIV HOLCL vs. East Africa Metals | VERTIV HOLCL vs. Calibre Mining Corp |
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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
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